USD/JPY: Building downside momentum toward 158.50–158.00 – UOB
|United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann report that USD/JPY fell to 158.59 and closed at 158.77, with downside momentum starting to build. They see scope for further weakness toward 158.50 intraday, while the 1–3 week view allows for a potential test of 158.00, provided the pair stays below resistance at 159.50.
Further weakness possible as momentum builds
"Following Monday’s price action, we noted yesterday that “there has been a slight increase in downward momentum.” We expected USD to “edge lower,” but we were of the view that “any decline is likely part of a lower range of 159.00/159.70.” We underestimated the increase in momentum, as USD dropped to a low of 158.59 before closing at 158.77 (-0.42%)."
"Yesterday, USD broke slightly below 158.70 as it dropped to a low of 158.59. Downward momentum is starting to build, and USD could potentially drop below 158.50 and test 158.00. To sustain the buildup in momentum, USD must hold below the ‘strong resistance’ level, now at 159.50."
"Today, USD could continue to weaken to 158.50 before stabilisation can be expected. A break below this level is not ruled out, but based on the current momentum, the major support at 158.00 is unlikely to come under threat. On the upside, a breach of 159.20 (minor resistance is at 159.00) would suggest USD is likely to range-trade instead of declining."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
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