USD/JPY: Rapid rise targets 160.00 cap – UOB

FXStreet Insights Team FXStreet

United Overseas Bank (UOB) economists Quek Ser Leang and Lee Sue Ann notes that USD/JPY has surged on the open after a quiet Friday, with short-term momentum now strong enough to challenge the 160.00 handle, though 160.50 is seen as tough resistance. The prior downside bias has faded after a break above 159.60, and the pair is now expected to consolidate between 158.70 and 160.50.

Upside momentum but resistance nearby

"While we expected USD to edge higher last Friday, we highlighted that “any advance is unlikely to threaten the strong resistance at 159.60.” We noted that “there is another resistance level at 159.35.” Our view did not materialise, as USD traded in a relatively narrow range of 158.90/159.37. USD closed at 159.29 (+0.22%), but it soared on the open today."

"In an unexpected move today, USD soared and broke above 159.60. The breach of our ‘strong resistance’ indicates that the downward pressure has faded. From here, we expect USD to trade in a range between 158.70 and 160.50."

"While the rapid rise has scope to move above 160.00, the major resistance at 160.50 is unlikely to come into view. Supports are at 159.55 and 159.35."

"There is a chance for USD/JPY to rise above 159.45; based on the lackluster upward momentum, any further advance is unlikely to threaten the 2024 high of 162.00."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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.

EUR/USD remains sidelined around 1.1600

EUR/USD clings to its decent gains on Monday and continues to move in a consolidative mood around the 1.1600 region. Improved risk appetite following the US-Iran agreement to reopen the Strait of Hormuz continues to weigh on the US Dollar, lending support to the risk complex. Looking ahead, investors are likely to remain on the sidelines ahead of Wednesday's FOMC meeting.

GBP/USD retreats from tops, back to 1.3420

GBP/USD keeps its advance past the 1.3400 yardstick at the beginning of the week. In the meantime, Cable continues to draw support from improved market sentiment following reports that the US and Iran have reached a framework agreement aimed at ending the conflict and reopening the Strait of Hormuz.

Gold stays firm, still below $4,400

Gold builds on its recent gains on Monday, climbing well north of the $4,300 mark per troy ounce. The yellow metal benefits from renewed selling pressure on the Greenback as investors reassess the implications of the US-Iran agreement to end hostilities and reopen the Strait of Hormuz. Market participants now turn their attention to Wednesday's FOMC gathering.