In the view of Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group, extra gains beyond 148.40 still appear unlikely for USD/JPY.
24-hour view: Our view for USD to consolidate last Friday was incorrect. Instead of consolidating, USD rose to a high of 147.96. Despite the advance, upward momentum has not improved by much. Today, USD could grind higher, but the major resistance at 148.40 is likely out of reach (there is another resistance at 148.15). Support is at 147.60, followed by 147.40.
Next 1-3 weeks: Last Friday (15 Sep, spot at 147.30), we noted that “downward pressure is easing, and the odds of USD pulling back further have diminished.” In NY trade, USD rose above our ‘strong resistance’ level of 147.80 (high has been 147.96). Not only did downward momentum faded, but upward momentum also increased, albeit not by much. From here, as long as USD stays above 146.85, USD could grind higher towards 148.40. At this stage, the likelihood of a sustained rise above this level is not high.