USD/JPY: Any advance may be limited to a test of 148.45 – UOB Group

FXStreet Insights Team FXStreet

US Dollar (USD) could strengthen further; deeply overbought conditions suggest any advance may be limited to a test of 148.45. In the longer run, USD could continue to advance, but it is unclear for now if it can reach 149.15, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

USD mught continue to advance

24-HOUR VIEW: "USD plummeted to a low of 145.47 two days ago and then snapped back up. Yesterday, when USD was at 146.90, we indicated the following: 'While there has been a build-up in upward momentum, this is likely to lead to a higher range of 146.30/147.35. In other words, USD is unlikely to break clearly above 147.35.' We underestimated the momentum build-up, as USD surged above 147.35, reaching a high of 148.26. Strong momentum indicates further USD strength, but deeply overbought conditions suggest any advance may be limited to a test of 148.45. The next resistance at 149.15 is likely out of reach. To sustain the overbought momentum, USD must hold above 147.40, with minor support at 147.75."

1-3 WEEKS VIEW: "USD dropped below our previous downside technical target of 145.85 two days ago (low of 145.47), and then rebounded strongly. Yesterday (18 Sep, spot at 146.90), we pointed out that 'while downward momentum has slowed with the strong rebound, only a breach of 147.35 (‘strong resistance’ level) would indicate that USD has moved back into a range-trading phase.' We added, 'until then, there is a slim chance for USD to revisit the 145.45 level.' USD then surged above 147.35 and reached a high of 148.26. The rapid increase in upward momentum indicates that rather than trading in a range, USD is more likely to continue to advance. That said, it is unclear for now if it can reach 149.15. We will maintain our view as long as the ‘strong support’ level, now at 146.80, is not breached."

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.

AUD/USD shows resilience below 38.2% Fibo. near mid-0.7100s

The AUD/USD pair touches a one-and-a-half-week low, around the 0.7140 region during the Asian session on Monday, though it lacks follow-through. Spot prices currently trade just above mid-0.7100s, down nearly 0.25% for the day.

USD/JPY: Japanese Yen edges lower vs USD amid Middle East jitters as Fed, BoJ meetings loom

The USD/JPY pair attracts some buyers at the start of a new week and climbs closer to the 154.00 mark during the Asian session, reversing a part of Friday's losses. Spot prices, however, remain confined in a range held over the past week or so and within striking distance of a nearly seven-month low, touched last Tuesday, as traders await this week's key central bank events.

Gold extends slump below $4,300 on broad US Dollar demand

Gold fell through $4,300 on Monday, as demand for the US Dollar surged ahead of the Federal Reserve's monetary policy decision this Wednesday. Increased bets for an interest rate hike lead the way up.

Crypto Today: Bitcoin, Ethereum, XRP recover ahead of US Senate vote on CLARITY Act

Bitcoin edges higher, trading near $77,884 as of Monday, in tandem with broader gains across the cryptocurrency market. Ethereum and Ripple follow Bitcoin’s neutral-to-bullish trajectory, holding key support levels at $2,521 and $1.38, respectively.

Will the Fed deliver the hawkishness markets are pricing in?

Fed hike bets increase after PPI and CPI reports. Updated dot plot to be crucial for the dollar’s reaction. Warsh’s independence faces test amid Trump’s pressure for lower rates. For the Dollar to extend gains, Fed needs to satisfy current hawkish bets.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.