USD/JPY: Overbought conditions may limit gains to 149.15 – UOB Group
US Dollar (USD) could strengthen further; overbought conditions may limit gains to 149.15. In the longer run, outlook for USD is positive; it remains to be seen if it can maintain the rapid pace of advance. The level to watch is 149.55, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Outlook for USD is positive
24-HOUR VIEW: "We stated yesterday that 'we continue to expect sideways trading, but the firmer underlying tone suggests a higher range of 146.90/147.60.' However, USD took off and surged to a high of 148.94. Strong momentum suggests USD could strengthen further, but overbought conditions may limit any gains to a test of 149.15. The major resistance at 149.55 is unlikely to come into view. To sustain the strong momentum, USD must not break below 147.95, with minor support at 148.20."
1-3 WEEKS VIEW: "After expecting USD to trade in a range since early last week, we highlighted yesterday (02 Sep, spot at 147.30) that 'while we continue to expect range-trading, the decreasing volatility over the past few days indicates that a 146.40/148.00 range is likely sufficient to contain the price movements for now.' We did not expect the surge in USD that sent it to a high of 148.94. Having broken clearly above 148.00, the outlook for USD is positive. However, it remains to be seen if it can maintain the rapid pace of advance. The level to watch is 149.55. We will maintain our positive outlook as long as USD holds above 147.50."
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FXStreet Insights Team
FXStreet
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