United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note USD/JPY has surged past 163 for the first time since 1986, raising intervention risks as the Japanese Yen (JPY) weakens. Intraday, they see upside risk with support at 163.00 and 162.75, while its 1–3 week view targets 163.50, contingent on holding above 162.40. On a 1–3 month basis, further gains are possible if the pair stays above the 21‑day EMA near 161.00.

Dollar-Yen extends rally toward 163.50

"24-HOUR VIEW: USD traded in a range two days ago. Yesterday, we pointed out that “while the price movements appear to be part of a range-trading phase, the firmer underlying tone suggests USD is likely to trade in a higher range of 162.30/162.70 today.” We did not expect upward momentum to build so quickly, as USD soared and broke above 163.00, printing a high of 163.23. The risk for today remains on the upside, but it is too early to determine whether USD can reach 163.50. On the downside, support is at 163.00, followed by 162.75."

"1-3 WEEKS VIEW: We have been expecting USD to trade in a range for two weeks now (as annotated in the chart below). In our most recent narrative from last Friday (17 Jul, spot at 162.35), we highlighted that “a narrower 161.30/163.00 range is likely sufficient to contain USD for now.” Yesterday, USD broke above 163.00. The price action suggests USD is likely to rise further to 163.50. USD must close above 163.50 before sustained advances can be expected. To sustain the rapid buildup in momentum, USD must hold above 162.40 (‘strong support’ level)."

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