USD/JPY to test 152.25 before the risk of a pullback increase – UOB Group

FXStreet Insights Team FXStreet

There is scope for US Dollar (USD) to test 152.25 before the risk of a pullback increases. In the longer run, outlook is mixed; USD could trade between 150.00 and 153.00 for now, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

USD might trade between 150.00 and 153.00 for now

24-HOUR VIEW: "Our view for USD to 'trade in a sideways range of 150.00/151.00' turned out to be incorrect, as USD soared and reached a high of 152.17. The sharp rise appears excessive, but there is scope for USD to test 152.25 before the risk of a pullback increases. We do not expect the major resistance at 153.00 to come into view. On the downside, if USD breaks below 151.10 (minor support is at 151.40), it would mean that USD is more likely to range-trade rather than testing 152.25."

1-3 WEEKS VIEW: "In our latest update from last Friday (17 Oct, spot at 150.15), we indicated that 'the odds of USD breaking clearly below 149.50 are increasing.' USD subsequently dropped to a low of 149.36 before rebounding strongly. Yesterday (21 Oct, spot at 150.55), we highlighted that 'downward momentum has slowed, but as long as the ‘strong resistance’ level at 151.35 is not breached, there is a chance for USD to retest the 149.35 level.' We did not expect USD to break above 151.35, as it soared to a high of 152.17. The recent sharp but short-lived swings have resulted in a mixed outlook, and USD could trade between 150.00 and 153.00 for now."

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.

GBP/USD flirts with tops near 1.3470

GBP/USD manages to regain composure and challenge the area of daily highs around 1.3470 on Friday. Cable picks up pace despite marginal gains in the Greenback in a context of swelling geopolitical tensions and rising global oil prices.

Gold remains below $4,100 despite receding Fed hike bets, weak USD

Gold opens with a bullish gap at the start of a new week amid receding Fed rate-hike expectations and a bearish US Dollar. Oil prices tumbled after Trump canceled an attack on Iran and said that a deal is near, easing inflation fears. This forces traders to dial back bets on extreme Fed tightening and drags the USD to a fresh low since June 17, which, in turn, is supporting the non-yielding bullion. However, the recent repeated failures to find acceptance above $4,100 warrant caution for XAU/USD bulls.

Gold: The $4,000 mark holds the downside for now

Gold faces renewed selling pressure, falling sharply toweard the $4,000 mark per troy ounce as the US Dollar regains momentum. Escalating US-Iran tensions are keeping inflation concerns and expectations of further Fed rate hikes alive, weighing further on the yellow metal.

Week ahead: US payrolls report and AI earnings to keep investors on edge

After the Fed decision, NFP report awaited for more rate hike clues. Employment also on the agenda in Canada and New Zealand. Chinese trade and Japanese wage data to be watched too. But Iran and AI headlines to remain in driver’s seat for risk sentiment.

Middle East War updates: Trump holds off Iran strikes on pledge Hormuz deal is close

Here’s a brief recap of the key developments in the Middle East war that occurred over the weekend, which are expected to have a significant impact on markets in the upcoming week. Risk sentiment improves on Monday, undermining demand for the US Dollar Index and drag crude oil prices lower.

9-3: Is the Federal Reserve’s vote tally Warsh's new forward guidance?

The rate did not move. Neither did the statement, and that’s the more interesting fact. Set the July 29 Federal Open Market Committee (FOMC) statement beside the one issued on June 17, and the two documents are identical apart from a single verb and a paragraph at the bottom naming three dissenters.