USD/JPY: The pair could test 161.00 – UOB Group

The US Dollar (USD) could test 161.00 first before levelling off. Resistance levels are at 161.00 and 161.50, but 161.50 is unlikely to come into view. Still, strong momentum suggests further USD strength, UOB Group analysts suggest.

Resistance levels are at 161.00 and 161.50

24-HOUR VIEW: “We expected USD to trade sideways yesterday. However, USD lifted off and surged to a high of 160.86, closing at its highest level since 1986. After such a sharp rally in a short span of time, conditions are unsurprisingly overbought. However, the advance is not showing any sign of levelling off just yet. Today, USD could test 161.00 first before levelling off. 161.50 is unlikely to come into view. On the downside, significant support can be found at 160.00, with minor support at 160.30.”

1-3 WEEKS VIEW: “We have held a positive view in USD since early last week. In our latest narrative from three days ago (24 Jun, spot at 159.85), we indicated that while USD ‘could break above 160.00, it is worth noting that there is another resistance level at 160.25.’ Yesterday, USD took off and not only broke above both 160.00 and 160.25, but also soared to 160.86. While conditions are severely overbought, strong momentum suggests further USD strength. Resistance levels are at 161.00 and 161.50. On the downside, the ‘strong support’ level has moved higher to 159.40 from 158.80.”