USD/JPY: Sharp declines appear excessive – UOB Group
|US Dollar (USD) is likely to trade in a range between 146.70 and 148.00. In the longer run, sharp declines appear excessive, but USD could drop to 146.30. The odds for a continued decline below this level are not high, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
USD might drop to 146.30
24-HOUR VIEW: "Our view for USD to rebound yesterday was incorrect. Instead of rebounding, USD fell sharply to a low of 146.57, recovering to close at 147.05 (-0.57%). The sharp drop appears excessive, and instead of continuing to decline, USD is more likely to trade in a range between 146.70 and 148.00."
1-3 WEEKS VIEW: "Yesterday (01 Oct, spot at 148.15), we highlighted that USD 'is now expected to trade in a wider range of 147.45/149.65.' Our assessment was incorrect, as USD fell for the fourth straight day, closing lower by 0.57% at 147.05. The declines over the past few days appear excessive, but with no sign of stabilisation yet, USD could drop further toward 146.30. Based on the current oversold momentum, the odds of a continued drop below this level are not high. To keep the momentum going, USD must hold below the ‘strong resistance’ level, currently at 148.55."
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