The USD/JPY pair has risen to a 37-year high of 160.87 overnight, with the next resistance level expected at 161.20, according to analysts at OCBC, Frances Cheung, and Christopher Wong. This surge in the USD/JPY pair has been driven by higher UST yields, indicating that the USDJPY may continue to rise above 160. The analysts also believe that surpassing the 2024 high could test the resolve of Japanese authorities.
With the USD/JPY pair on the rise, market participants are closely watching for any potential intervention by central banks. The analysts at OCBC note that while intervention could slow the pace of depreciation, it may not be enough to reverse the trend. In order for the USD/JPY pair to turn lower, significant events such as a turnaround in the US dollar or a rate cut by the Federal Reserve, or a signal from the Bank of Japan to normalize policy, would need to occur. With none of these scenarios currently in play, the path of least resistance for the USD/JPY pair may continue to be to the upside.
Currently, the pair is trading at 160.41, with bullish momentum still intact based on the daily chart. However, the RSI indicator shows signs of turning lower from near overbought conditions. The next resistance levels to watch for are at 161.20, followed by levels around 164. On the downside, support levels can be found at 157.70 and 156.60.
In summary, the USD/JPY pair has reached a 37-year high of 160.87 overnight, with analysts at OCBC predicting the next resistance at 161.20. Market participants are keeping a close eye on potential intervention by central banks, as the rise in the USD/JPY pair may test the resolve of Japanese authorities. For the pair to turn lower, significant events such as a reversal in the US dollar or a signal from the Bank of Japan to normalize policy would need to occur. Currently, the pair is trading at 160.41, with bullish momentum intact but some signs of potential reversal. Resistance levels to watch for are at 161.20 and 164, while support levels can be found at 157.70 and 156.60.
