USD/JPY: Upside risks on the day – OCBC

USD/JPY continued to trade higher. Pair was last at 152.93 levels, OCBC's FX analysts Frances Cheung and Christopher Wong note.

Slight risk to the upside in the interim

"Daily momentum is showing signs of turning mild bullish while RSI rose. Slight risk to the upside in the interim. Resistance at 153.30 (Oct high), 154.40 levels. Support at 151.70 (23.6% fibo retracement of the run-up), 150.60/70 levels (38.2% fibo, 21 DMA)."

"We believe if fiscal prudence is pursued, then the new government should be reassuring for markets and JPY. Given some political clarity, we still see room for BoJ to hike on 30 Oct as macro conditions allow for policy normalization. Fed-BoJ policy divergence should help underpin the direction of travel to the downside."