USD/JPY: Consolidation on daily chart- OCBC

USD/JPY rose sharply this morning, and was last seen at 154.84, OCBC FX analysts Frances Cheung and Christopher Wong notes.

Bullish momentum on daily chart fades

"Markets were earlier anticipating some hint on policy moves from Governor Ueda at an event in Nagoya but his remarks were interpreted as less hawkish. He said that actual timing of adjustments will continue depending on developments in economic activity and prices as well as financial conditions - akin to policy decision being data dependent."

"Last Fri, Finance Minister Kato said authorities will respond appropriately to any excessive move and authorities see one sided, sudden move in FX markets. In the very near term, self-inflicted concerns of officials' intervention may slow pace of USD/JPY rise."

"Bullish momentum on daily chart faded while RSI was flat. Potential bearish divergence on RSI observed. Further downside play not ruled out. Support at 153.00/30 (21 DMA, 61.8% fibo retracement of Jul high to Sep low) needs to be broken for bears to gather further traction towards 150.70 (50% fibo). Resistance at 156.50 (76.4% fibo)."