USD/JPY could see its upside bias mitigated on a breach of the 146.85 level, suggest UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.
24-hour view: Last Friday, USD rose to a high of 147.96. Yesterday, we indicated that “despite the advance, upward momentum has not improved by much”, and we expected it to grind higher. Instead of grinding higher, USD traded sideways in a relatively narrow range between 147.54 and 147.87. The price action is likely part of a consolidation phase. Today, USD is likely to trade in a range, probably between 147.35 and 147.90.
Next 1-3 weeks: Our update from yesterday (18 Sep, spot at 147.80) is still valid. As highlighted, upward momentum has increased slightly, and USD could edge higher. At this stage, the likelihood of a sustained rise above this level is not high. On the downside, if USD breaks 146.85 (no change in ‘strong support’ level from yesterday) would indicate that the mild upward pressure has eased.
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