USD/JPY: Likely to consolidate in a 144.00/145.15 – UOB Group
|US Dollar (USD) is likely to consolidate in a 144.00/145.15 range against Japanese Yen (JPY). In the longer run, increase in momentum is not sufficient to indicate a sustained advance just yet; USD must first break and hold above 145.50, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Increase in momentum is not sufficient to indicate a sustained advance
24-HOUR VIEW: "USD traded in a choppy manner last Thursday. On Friday, we highlighted that 'despite the choppy price action, there has been a slight increase in upward momentum.' We also highlighted that 'instead of a sustained rise, USD is more likely to trade in a higher range of 142.95/144.40.' We did not expect USD to break above 144.40 and soar to 145.08. The rapid rise appears to be excessive, and instead of expecting USD to continue to rise, we now hold the view that USD is more likely to consolidate in a 144.00/145.15 range."
1-3 WEEKS VIEW: "In our most recent narrative from last Wednesday (04 Jun, spot at 143.85), we stated that 'the recent price action 'suggests USD is still trading in a range, most likely between 142.10 and 145.50.' Last Friday, USD soared to a high of 145.08 before closing on a strong note at 144.85 (+0.93%). The increase in upward momentum is not sufficient to indicate a sustained advance just yet. However, if USD were to break and hold above 145.50, it could potentially trigger a strong recovery. The likelihood of USD breaking clearly above 145.50 will remain intact, provided that the ‘strong support’ level, currently at 143.00, is not breached."
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