USD/JPY: 158.90 is likely out of reach today – UOB Group

FXStreet Insights Team FXStreet

Strong momentum indicates further US Dollar (USD) strength; deeply overbought conditions suggest that 158.90 is likely out of reach today. In the longer run, USD is likely to continue to rise; the level to watch is 158.90, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

USD/JPY is likely to continue to rise

24-HOUR VIEW: "When USD was at 156.85 in the early Asian trade yesterday, we noted 'a tentative increase in upward momentum'. We expected USD to 'drift higher” but we pointed out that “any advance is likely part of a higher range of 156.55/157.20'. The subsequent price movements did not turn out as expected. USD lifted off, broke above 157.20 and surged to a high of 158.18. Strong momentum indicates further USD strength, but deeply overbought conditions suggest that 158.90 is likely out of reach today. Any pullback today is likely to remain above 157.40, with minor support at 157.75."

1-3 WEEKS VIEW: "In our most recent narrative from last Wednesday (06 Jan, spot at 156.70), we highlighted that USD 'is likely to trade in a range for now between 155.60 and 157.50'. Last Friday, in a sudden move, not only did USD break above 157.50, but it also soared to a high of 158.18. With rapidly increasing upward momentum, USD is likely to continue to rise. The level to watch is last year’s high, near 158.90. We will remain positive on USD as long as it holds above the ‘strong support’ level, currently at 157.00."

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD flirts with tops near 1.3470

GBP/USD manages to regain composure and challenge the area of daily highs around 1.3470 on Friday. Cable picks up pace despite marginal gains in the Greenback in a context of swelling geopolitical tensions and rising global oil prices.

EUR/USD trims losses, back above 1.1500

EUR/USD picks up some pace and bouces off earlier lows, reclaiming the 1.1500 threshold and beyond at the end of the week. The pair’s modest pullback follows a persistent risk-averse market mood and renewed buying interest for the US Dollar.

Gold: The $4,000 mark holds the downside for now

Gold faces renewed selling pressure, falling sharply toweard the $4,000 mark per troy ounce as the US Dollar regains momentum. Escalating US-Iran tensions are keeping inflation concerns and expectations of further Fed rate hikes alive, weighing further on the yellow metal.

Bitcoin eyes 50-day EMA breakout, Ethereum consolidates, XRP steadies

Bitcoin, Ethereum, and Ripple trade near key technical levels on Friday as the broader cryptocurrency market pauses following last week's recovery. BTC is approaching the 50-day Exponential Moving Average while ETH continues to consolidate between two major EMAs.

Warsh needs to restore his reputation

We were glad to see our deeply negative reaction to the Warsh press conference was not some personal peculiarity. Just about everybody in the financial press felt the same way. The consensus is building it’s not the Fed in the dog-house but only Warsh. Today the WSJ changed it tune and blasted Warsh—"the honeymoon is already over..”

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.