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- USD/JPY risks further losses near term – UOB
USD/JPY risks further losses near term – UOB
A sustained drop below the 145.50 appears unlikely for USD/JPY in the short-term horizon, note Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.
Key Quotes
24-hour view: Yesterday, we held the view that USD “has room to test 146.50.” We were also of the view that “the major support at 146.00 is unlikely to come under threat.” While USD weakened as expected, it plummeted to 145.89 before rebounding. The strong rebound in oversold conditions suggests USD is unlikely to weaken further. Today, it is more likely to trade in a range, probably between 146.00 and 147.30.
Next 1-3 weeks: After USD fell sharply last Friday, we highlighted yesterday (11 Sep, spot at 147.10) that “the current price movements are likely part of a consolidation phase.” We expected USD to trade between 146.00 and 148.00. We added, “Looking ahead, if USD breaks clearly below 146.00, it could trigger a deep pullback in USD.” We did not anticipate the volatile price action as USD plunged to 145.89 before rebounding strongly. While we prefer to see USD close below the support at 146.00, the overall price action suggest that USD could pullback further to 145.50. At this stage, the likelihood of USD breaking clearly below this level is not high. On the upside, if USD breaks above 147.80, it would indicate that it is not ready to pullback further.
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