Japanese Yen: Overbought rally faces 158.40 cap – UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that USD/JPY remains supported after testing the 157.30 area, with short-term price action expected to stay within a 156.90–157.80 range. Looking ahead 1–3 weeks, they see room for further USD strength, but highlight that overbought conditions could limit gains near the 158.40 resistance level. The bullish outlook remains intact as long as USD holds above the key support level at 156.20.

Dollar strength tempered by key resistance

"24-HOUR VIEW: Yesterday, USD rose to a high of 157.52 before closing at 157.36 (+0.32%). Despite the advance, there has been no significant increase in upward momentum. However, there is a chance for USD to rise further today, even though any advance is likely to stay within a 156.90/157.80 range."

"1-3 WEEKS VIEW: In our most recent narrative from last Thursday (17 Sep, spot at 156.05), we highlighted that “upward momentum is building, but it is not that strong,” and USD “could edge higher to 157.30.” USD soared to a high of 158.05. Further USD strength seems likely, but given the overbought conditions, any advance is expected to face firm resistance at 158.40. To keep the momentum going, USD must hold above the ‘strong support’ level at 156.20."

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