The US Dollar (USD) is expected to remain strong against the Japanese Yen (JPY), with momentum likely to push the pair higher despite overbought conditions, according to UOB Group’s FX strategists Quek Ser Leang and Peter Chia.
The analysts noted that while it is uncertain whether USD/JPY can break above the key 153.00 level in the near term, the broader trend points to continued USD strength, with 153.80 as the next level to watch.
Short-term view: momentum favors further upside
In their 24-hour outlook, UOB analysts observed that USD “surged on Monday” and continued higher into early Asian trade on Wednesday after briefly consolidating. They noted that the pair’s rally had exceeded expectations: “Yesterday, we indicated that USD could continue to rise within a higher range of 149.70–150.70 and that a sustained break above 150.70 was unlikely.
We were correct on the first count, but not the second, as USD surged to a high of 152.04.” The analysts added that impulsive momentum is likely to outweigh the overbought conditions in the short term, though a clear break above 153.00 remains uncertain. Immediate support levels are seen at 151.80 and 151.30.
Medium-term view: bullish trend intact above 150.50 support
From a one- to three-week perspective, UOB maintains a bullish outlook on the USD/JPY pair. “The price action suggests USD could continue to rise and test the significant resistance zone of 150.90–151.20,” the analysts wrote, adding that the pair’s strong rally beyond that range reinforces the upside bias.
They now see potential for further USD strength toward 153.80, provided the pair holds above strong support at 150.50.
