United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann note USD/JPY has pushed up to 159.84, validating earlier expectations for a retest of 159.65. While upward momentum is slowing, they still look for the pair to edge higher within a 159.40–160.05 intraday band. Over the next few weeks, decreasing volatility suggests a broader 159.00–160.50 range will likely contain moves.

Dollar-Yen stays bid but capped

"24-HOUR VIEW: On Tuesday, we indicated that “there is scope for USD to retest the 159.65 level”. USD subsequently traded within a range of 159.08/159.57. Yesterday, when USD was at 159.45, we highlighted the following: “There has been a slight increase in upward momentum, and there is still scope for USD to test 159.65. A break above this level is not ruled out, but any further advance is unlikely to reach 159.85. Support levels are at 159.30 and 159.10.” Our assessments turned out to be correct, even though USD rose to within one pip of 159.85 (high was 159.84). Although upward momentum is starting to slow, there is no sign of a pullback. Today, we expect USD to edge higher, but any advance is likely part of a higher range of 159.40/160.05. In other words, USD is unlikely to break clearly above 160.05."

"1-3 WEEKS VIEW: We indicated on Monday (20 Apr, spot at 159.10) that after the recent choppy price action, “we are not able to derive much from the volatile price action.” We also indicated that “for the time being, USD could trade between 157.55 and 160.50.” We continue to expect USD to trade in a range, but the decreasing volatility suggests a range of 159.00/160.50 is likely enough to contain the price movements for now."

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