USD/JPY: Any advance is likely part of a higher range of 149.20/150.15 – UOB Group

Further US Dollar (USD) strength is not ruled out, but any advance is likely part of a higher range of 149.20/150.15. In the longer run, USD could rise further to 150.15, with lesser odds of reaching 150.90, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

USD might rise further to 150.15

24-HOUR VIEW: "Yesterday, we expected USD to 'trade in a range between 148.20 and 149.15.' However, instead of trading in a range, USD surged, reaching a high of 149.92. Further USD strength is not ruled out. However, with negative divergence forming, combined with deeply overbought conditions, suggest that any advance is likely part of a higher range of 149.20/150.15."

1-3 WEEKS VIEW: "After USD rose to a high of 148.91 two days ago, we highlighted yesterday that 'while the renewed upward momentum suggests USD could reach 149.15, it is currently unclear whether it could continue to rise toward the next major resistance at 149.55.' We did not expect USD to then surpass both levels, as it surged to a high of 149.92. The sharp rally over the past couple of days appears excessive, but with no sign of slowing just yet, USD could rise further to 150.15, with lesser odds of reaching the major resistance at 150.90. To sustain the overbought momentum, USD must hold above the ‘strong support’ at 148.50 (level was at 147.70 yesterday)."