USD/JPY: Still scope for further upside – UOB

24-hour view: Our view for USD to trade with a downward bias yesterday was incorrect, as it rose to a high of 146.39 before closing on a firm note at 146.17 (+0.55%). Today, while there is room for USD to rise above last week’s high near 146.55, it might not be able to maintain a foothold above this level. The next resistance at 147.10 is also unlikely to come under threat. On the downside, if USD breaches 145.40 (minor support is at 145.80), it would indicate that the current upward pressure has faded. 

Next 1-3 weeks: We highlighted yesterday that “the odds for further sustained advance in USD are not high”. However, we held the view that only a breach of 144.00 would indicate that USD is not rising further. USD then rebounded and closed on a firm note at 146.17 (+0.55%). Upward momentum has increased, albeit just a tad. From here, USD could rise above last week’s high near 146.55. However, it remains to be seen if there is enough momentum to carry USD to the next major resistance at 147.50. Overall, only a breach of 144.50 (‘strong support’ level was at 144.00 yesterday) would indicate that USD is not advancing further.