US Dollar (USD) is likely to trade in a range of 145.95/146.95 against Japanese Yen (JPY). In the longer run, rapid increase in momentum indicates USD could weaken to 145.75, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Rapid increase in momentum indicates USD can weaken
24-HOUR VIEW: “USD dropped sharply on Tuesday. Yesterday (Wednesday), when USD was at 146.60, we stated that ‘strong downward momentum suggests further USD weakness.’ However, we pointed out that ‘due to the oversold conditions, any decline might not be able to break the major support at 145.75.’ USD declined less than expected, dropping to a low of 146.09 before settling at 146.49 (-0.10%). Today, USD is likely to trade in a range, but the residual downward momentum suggests a lower range of 145.90/146.90.”
1-3 WEEKS VIEW: “Following the sharp decline in USD earlier this week, we highlighted the following yesterday (24 Jul, spot at 146.60): ‘The rapid increase in momentum indicates USD could weaken to 145.75. If it breaks clearly below this level, the next level to watch is 144.95. To keep the momentum going, USD must hold below 148.00.’ We maintain our but we are lowering the ‘strong resistance’ level from 148.00 to 147.60.”
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