USD/JPY still points to a potential test of 149.00 – UOB

The continuation of the upside momentum could encourage USD/JPY to revisit the 149.00 level in the next few weeks, argue Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: We highlighted yesterday that USD “is likely to strengthen further, but it is unlikely to reach 149.00.” We also highlighted that “in order to keep the momentum going, USD must stay above 147.00.” USD did not strengthen further as it traded between 147.00 and 147.81 before ending the day largely unchanged at 147.65 (-0.04%). Despite the relatively stable price action, there appears to be enough momentum to carry USD higher to 148.30. The 149.00 level is still likely out of reach. On the downside, if USD breaks below 147.15 (minor support is at 147.45), it would mean that USD is not strengthening further. 

Next 1-3 weeks: We continue to hold the same view as yesterday (06 Sep, spot at 147.70), wherein USD is likely to rise further, probably to 149.00. In order to maintain the rapid buildup in momentum, USD must stay above 146.70 (‘strong support’ level was at 146.45 yesterday).