USD/JPY: Can break above the major resistance at 151.00 – UOB

The US Dollar (USD) could break above the major resistance at 151.00, but it might not be able to maintain a foothold above this level. In the longer run, there has been a clear increase in momentum; if USD breaks above 151.00, the focus will shift to 152.00, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

The focus may shift to 152.00 above 151.00

24-HOUR VIEW: “We expected USD to trade in a sideways range of 149.00/150.00 yesterday. USD then dropped to 149.07 before staging a surprising sharp rally, reaching a high of 150.88 in NY trade. The sharp and swift increase in momentum is likely to lead to further USD strength. A break above the major resistance at 151.00 will not be surprising, but overbought conditions suggest USD might not be able to maintain a foothold above this level. The next resistance at 151.50 is unlikely to come under threat. Support levels are at 150.30 and 150.00.”

1-3 WEEKS VIEW: “We have maintained a positive USD stance since early this month. In our most recent narrative from last Friday (18 Oct, spot at 150.00), we highlighted that ‘while USD rose to 150.32, upward momentum has only improved slightly, and it remains to be seen if USD could rise to 151.00.’ We added, ‘a clear break below 149.00 would indicate that the USD strength has ended.’ Yesterday, USD dropped close to 149.00, reaching a low of 149.07. However, it took off from the low and soared to 150.88. This time around, there has been a clear increase in momentum, and if USD breaks above 151.00, the focus will then shift to 151.90. On the downside, the ‘strong support’ level has moved higher to 149.45 from 149.00.”