USD/JPY: USD may rise to 145.50 – UOB Group

US Dollar (USD) could rise to 145.50; A sustained advance above this major resistance level is unlikely. In the long term, the bullish momentum has dissipated; The USD could continue to trade choppy but is likely to remain within a range of 140.00/146.00, say UOB Group FX analysts Quek Ser Leang and Lee Sue Ann.

USD likely to stay within a range of 140.00/146.00

24-HOUR VIEW: “Last Friday, we held the view that the USD ‘could rise above the main resistance at 145.50, but a sustained advance above this level seems unlikely.’ We were also of the view that ‘the next resistance at 146.10 is unlikely to come into play.’ The subsequent price movements did not turn out as we anticipated, the USD spiked to a high of 146.49, then quickly fell to a low of 142.05. The sell-off seems overdone, but USD weakness could retest the level. 142.00 before stabilization is likely. Today, a sustained fall below 142.00 is unlikely. Resistance at 143.70 would mean that weakness has stabilized.

1-3 WEEK VIEW: “We switched to a positive stance on the USD on September 17 (pair at 143.00), indicating that ‘if the USD can break above 144.00, it could trigger a stronger recovery towards 145.50.’ As we continue the advance, in our update last Friday (September 27, pair at 144.95), we indicated that ‘we continue to expect the USD to rise to 145.50, but it has to break and maintain a position above this level before further advance is likely.’ We added, ‘since the momentum has not increased much, the possibility of it reaching the next major resistance at 147.00 is not high for now.’ We did not anticipate subsequent volatility as the USD soared to 146.49 and then, in a dramatic reversal, fell to 142.05. The break of our ‘strong support’ level at 143.40 indicates momentum building. The bullish trend has dissipated. From here on, the USD could continue to trade choppyly, but is expected to remain within a range of 141.00/146.00.”