Sustainable gains in USD/JPY need to leave behind the 145.00 yardstick in the next weeks, comment FX Strategists at UOB Group Lee Sue Ann and Quek Ser Leang.
Key Quotes
24-hour view: “We highlighted yesterday that ‘the current price movement is likely part of a consolidation phase’ and we expected USD to ‘trade sideways between 143.70 and 144.70’. Our view of sideway-trading was not wrong even though USD traded within a narrower range than expected (144.04/144.79). Further sideway-trading appears likely, expected to be within a range of 144.00 and 145.00.”
Next 1-3 weeks: “Two days ago (27 Sep, spot at 144.30), we noted that upward momentum is building but USD has to close above 145.00 before a sustained advance is likely. While USD traded in a quiet manner the past couple of days, the underlying tone still appears to be firmed. That said, unless USD breaks above 145.00 within these 1 to 2 days, the build-up in momentum would fizzed out. Overall, only a break of 143.40 (no change in ‘strong support’ level from yesterday) would indicate that the risk of USD closing above 145.00 has subsided.”