USD/JPY: Oversold conditions can bush the USD downwards – UOB Group

USD could weaken; given the oversold conditions. Downward momentum has increased, albeit not significantly, UOB Group’s FX analyst Quek Ser Leang and Lee Sue Ann note.

Downward momentum has increased

24-HOUR VIEW: “Yesterday, we indicated that ‘The current price action is likely part of a range trading phase, probably between 153.60 and 154.70.’ Our view was incorrect, as USD tumbled to a low of 152.97 before closing at 153.10 (--0.72%). Strong downward momentum suggests further USD weakness. However, given the oversold conditions, any decline may not be able to break clearly below 152.50. To sustain the momentum, USD must stay below 153.80 (minor resistance is at 153.40).”

1-3 WEEKS VIEW: “Our most recent narrative was from last Thursday (21 Nov, spot at 155.25), wherein USD “is expected to trade in a range, likely between 153.30 and 156.50.” Yesterday, USD broke below 153.30, closing at 153.10. Downward momentum has increased, albeit not significantly. From here, USD could edge lower, but it remains to be seen if any decline can reach the major support at 151.60. Our view will remain the same provided that 154.35 is not breached.”