United Overseas Bank (UOB) economists Quek Ser Leang and Lee Sue Ann report that USD/JPY surged on the open after a quiet Friday, breaking above the previously strong resistance level at 159.60, which signals that the prior downside bias has faded [1]. The pair closed at 159.29 (+0.22%) after trading in a narrow range of 158.90/159.37 last Friday, but unexpectedly soared today [1]. UOB now expects USD/JPY to consolidate between 158.70 and 160.50, with short-term momentum strong enough to challenge the 160.00 handle, although 160.50 is seen as tough resistance [1]. Supports are noted at 159.55 and 159.35 [1].
The economists highlight that while there is scope for USD/JPY to rise above 159.45, the lackluster upward momentum suggests any further advance is unlikely to threaten the 2024 high of 162.00 [1]. This shift in momentum and breach of resistance levels indicate a change in market sentiment, with the pair now expected to trade within a higher range [1].
No specific market reactions or analyst opinions regarding broader implications were mentioned in the article. The focus remains on technical levels and short-term trading expectations for USD/JPY [1].
CONCLUSION
USD/JPY has broken above key resistance, signaling a shift in momentum and a higher trading range. While the pair may challenge 160.00, further advances are expected to be limited by resistance at 160.50. The market takeaway is a medium-impact move with technical consolidation expected.