United Overseas Bank’s (UOB) Quek Ser Leang notes USD/JPY retains an upside bias, with scope for a test of 162.80 intraday while major resistance at 163.00 is unlikely to be reached. Over 1–3 weeks, the outlook is mixed, with trading expected between 160.60 and 163.00. On a 1–3 month view, the advance can extend as long as the pair holds above the 21-day EMA at 161.00.

Advance intact while above 161.00

"24-HOUR VIEW: While we indicated yesterday that “the bias for USD is tilted to the upside,” we pointed out that “any advance is likely to be limited to a test of 162.70.” We pointed out that “support is at 162.00, followed by 161.80.” We were not wrong, as after dipping briefly to 162.05, USD rose and printed a high of 162.70. USD then eased from the high to close at 162.58 (+0.30%). Although there has been no clear increase in upward momentum, there is scope for USD to test 162.80 before a pullback can be expected. The major resistance at 163.00 is unlikely to come into view. Support is at 162.35; a breach of 162.20 would suggest that USD is likely to range-trade instead of testing 162.80."

"1-3 WEEKS VIEW: Our most recent narrative was from two days ago (07 Jul, spot at 162.10), when we indicated that “the outlook for USD is mixed,” and it could “trade between the two major levels of 160.60 and 163.00.” Although volatility has eased since then, we continue to hold the same view for now"

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)