USD/JPY: Bears set to push towards testing 141.66 – UOB Group

The US Dollar (USD) is likely to range trade, probably between 143.90 and 145.10. In the longer term, USD remains under pressure, and increase in momentum has increased the chance of it reaching 141.66, UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note.

Rangebound between 143.90 and 145.10

24-HOUR VIEW: “We expected USD to ‘decline further, potentially reaching 142.80.’ We highlighted that ‘to keep the momentum going, USD must remain below 145.00.’ Our expectations did not turn out, as USD rebounded from 143.43 to 144.65, closing modestly higher at 144.52 (+0.10%). Slowing downward momentum, combined with oversold conditions, suggests USD is likely to range trade today, probably between 143.90 and 145.10.”

1-3 WEEKS VIEW: “We highlighted yesterday (26 Aug, spot at 143.85) that USD ‘remains under pressure.’ We also highlighted that the increase in momentum from last Friday ‘has increased the chance of it reaching 141.66, the low registered early this month.’ While we continue to hold the same view, oversold short-term conditions could lead to a couple of days of range trading first. Overall, only a breach of 146.50 (no change in ‘strong resistance’ level) would mean that the current downward pressure has eased.”