UOB strategists Quek Ser Leang and Lee Sue Ann note USD/JPY remains underpinned after a volatile session that saw a spike to 157.76 and a brief drop to 157.04 before closing at 157.61. Intraday, the pair could edge higher but is expected to stay below 157.95. Over 1–3 weeks, any further recovery should meet significant resistance around 158.30, with strong support now at 156.70.
Dollar Yen recovery momentum moderates
“24-HOUR VIEW: Two days ago, USD rose and closed 0.33% higher at 157.16. Yesterday, when USD was at 157.30, we indicated that “the rapid increase in upward momentum suggests USD could rise further to 157.65.” We also indicated that “a break above this level is not ruled out, but the major resistance at 157.95 is likely out of reach.” We added, “to sustain the build-up in momentum, USD must hold above 157.00 (with minor support at 157.15).” While our view was not wrong, the price movements did not quite turn out as expected, as after rising to 157.76, USD plunged sharply, but briefly, to 157.04, and then rebounded to close at 157.61 (+0.29%). While there has been no further increase in upward momentum, USD could edge higher today. That said, the resistance at 157.95 is still likely out of reach. Today’s support levels are 157.40 and 157.20.”
“1-3 WEEKS VIEW: Yesterday (12 May, spot at 157.30), we indicated that “while there is room for USD to continue to recover, any advance is expected to face significant resistance at 158.30.” We also indicated that “break of 156.30 would indicate that USD is likely to range-trade instead of recovering.” We continue to hold the same view, but we are revising the ‘strong support’ level from 156.30 to 156.70.”
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Source: https://www.fxstreet.com/news/japanese-yen-recovery-against-us-dollar-faces-resistance-near-15830-uob-202605130841
