Japanese Yen weakens within broad range against US Dollar as bearish momentum strengthens – UOB

With USD/JPY at 158.50, United Overseas Bank’s (UOB) Quek Ser Leang notes that the Japanese yen remains the weakest G10 currency amid continued carry trades. The dollar is expected to strengthen slightly towards 158.80 during the session, although the key resistance level of 159.05 should remain beyond reach. Despite longer-term downside risks, UOB continues to expect trading within a 157.50–159.05 range over 1–3 weeks.

Dollar-yen retains support as 159.05 limits the upside

"24-HOUR VIEW: USD traded within a range of 157.67/158.33 last Friday and closed largely unchanged at 157.99 (+0.01%). When it was at 157.90 yesterday, we highlighted the following: “Despite range-trading and the largely unchanged close, downward momentum appears to be building. Today, we expect USD to edge lower and test 157.50.” We were incorrect, as after edging lower to 157.68, USD rose sharply to a high of 158.54. This time around, upward momentum appears to be building. Today, USD could edge higher to 158.80. The major resistance at 159.05 is unlikely to come into view. To sustain the momentum buildup, USD must hold above 158.15, with minor support at 158.30."

"1-3 WEEKS VIEW: In our most recent narrative from last Wednesday (14 Oct, spot at 158.35), we highlighted that USD “has likely moved into a range-trading phase between 157.50 and 159.05.” Since then, USD has traded within the range, and there is no change in our view."

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