USD/JPY: Might test the significant resistance zone of 150.90/151.20 – UOB Group

US Dollar (USD) could continue to rise; any advance is likely part of a higher range of 149.70/150.70. In the longer run, the price action suggests USD could continue to rise and test the significant resistance zone of 150.90/151.20, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Price action suggests USD could continue to rise

24-HOUR VIEW: "USD gapped higher at the open yesterday. When it was at 149.35, we highlighted that 'the sharp rise appears to be excessive, but there is scope for USD to continue to advance.' However, we were of the view that it 'is unlikely to be able to break clearly above 150.00.' We were correct on the first count, but not the second, as USD surged to a high of 150.47. While the sharp rise still seems excessive, the rally is not showing signs of slowing. Today, USD could continue to rise, but any advance is likely part of a higher range of 149.70/150.70. In other words, a sustained rise above 150.70 is unlikely."

1-3 WEEKS VIEW: "Yesterday (06 October, spot at 149.35), we highlighted that 'upward momentum is building, but USD must break and hold above the major resistance at 150.00 before a sustained advance is likely.' We added, 'the likelihood of a decisive break above 150.00 will remain intact as long as 147.75 (‘strong support’ level) holds.' USD subsequently soared to 150.47 before closing higher by a whopping 1.97% (150.35). The price action suggests USD could continue to rise and test the significant resistance zone of 150.90/151.20. On the downside, the ‘strong support’ level is now at 148.50 instead of 147.75."