Title: USD/JPY: UOB Group Views a Sustained Break Above 154.50 as Unlikely
Source: FXStreet
Author: Anil Panchal
Original Article URL: [USD/JPY: Clear break above 154.50 is unlikely – UOB Group](https://www.fxstreet.com/news/usd-jpy-clear-break-above-15450-is-unlikely-uob-group-202511031158)
UOB Group economists weighed in on the outlook for the USD/JPY currency pair in a report published on Friday, November 3, 2023. According to the analysis offered by UOB Group’s FX strategists, the US dollar is expected to hold a strong position against the Japanese yen in the near term. However, they anticipate that the currency pair is unlikely to make a sustained and clear breakout above the 154.50 resistance level in the immediate future. Their technical analysis further supports a scenario of consolidation with an upward bias, although major bullish moves are seen as limited unless key resistance levels are surpassed.
Below is a detailed breakdown of the analysis and market context surrounding the USD/JPY outlook.
Technical Analysis: USD/JPY Confronts Robust Resistance Near 154.50
UOB Group’s analysis released via a note to institutional clients highlighted the importance of the 154.50 price zone as a key technical level. According to the strategists:
– Momentum indicators suggest limited upside potential.
– Price action shows signs of consolidation, though still maintaining an upward trajectory.
– The pair failed to produce enough strength to achieve a daily or weekly close well above 154.50, suggesting strong resistance at this level.
The report also states that the recent rise in the USD/JPY pair is losing steam. While prior sessions showed bullish movements, the momentum is not compelling enough to trigger a breakout beyond resistance thresholds.
Key Points from UOB’s Daily Commentary:
– Short-term bias for the USD/JPY pair remains tilted upwards.
– Nonetheless, a durable break above the 154.50 level appears unlikely in coming sessions.
– A pullback may unfold if the pair struggles at resistance zones or faces US dollar weakness.
– The downside support area is located near 152.40, which may hold if a reversal were to occur.
Summary of Near-Term USD/JPY Forecast from UOB:
– Likely Range: 152.40–154.50
– Bias: Slight bullish inclination, though strong appreciation beyond resistance is constrained
– Daily momentum: Mixed and starting to decline
– Weekly momentum: Still positive but not strengthening
Market Fundamentals Behind USD/JPY Movements
The USD/JPY pair has remained strong over the past weeks, due in part to diverging monetary policy stances between the US Federal Reserve and the Bank of Japan. The Federal Reserve has maintained a hawkish tone, suggesting that interest rates could remain higher for longer to bring inflation back to the target range. Meanwhile, the Bank of Japan continues to maintain ultra-loose monetary policy, struggling to create sustained inflation and wage growth.
Factors Contributing to USD Strength:
– Hawkish outlook from the Federal Reserve
– Resilient US economic data, especially in the labor market and GDP
– Safe haven demand for US dollar assets, especially Treasury yields
On the other side, the Japanese yen has remained under pressure due to:
– An accommodative policy stance from the Bank of Japan
– Persistently low inflation levels in Japan compared to the US
– Moderate domestic economic recovery, lagging behind other major economies
Technical Indicators in USD/JPY’s Current Price Action
Analyzing the behavior of technical indicators helps deepen insights into how long the USD/JPY uptrend might last or whether a reversal is near. The UOB Group’s commentary outlines the key technical signals supporting consolidation at current levels.
Moving Averages:
– The 50-day moving average (MA) shows strong support well beneath 152.00, signifying long-term bullish pressure remains intact.
Explore this further here: USD/JPY trading.