Japanese Yen: Negative bias against USD may fade below 158.40 – UOB

FXStreet Insights Team FXStreet

United Overseas Bank (UOB) strategists Quek Ser Leang and Lee Sue Ann say USD/JPY’s uptrend is losing steam after the pair failed to extend gains beyond 159.25 and posted its first daily decline in seven sessions. They still see scope for a move above 159.45 in the months ahead, but warn that a break below 158.40 would turn the short-term outlook neutral, with today’s range seen at 158.40–159.10.

Dollar-Yen momentum fades near recent highs

"24-HOUR VIEW: We expected USD to “trade in a range between 158.75 and 159.25” yesterday. However, USD fluctuated between 158.57 and 159.16. We are not able to derive much from the price action. Today, USD could trade between 158.40 and 159.10"

"1-3 WEEKS VIEW: Tracking our positive USD view from early last week (as annotated in the chart below), we highlighted on Tuesday (19 May, spot at 158.80) that “short-term upward momentum is starting to fade, and USD must break and hold above 159.25 before further gains are likely.” Yesterday, USD closed lower for the first time in seven days (158.91, -0.08%). Upward momentum continues to slow, and a breach of 158.40 (no change in ‘strong support’ level) would shift the outlook for USD from positive to neutral."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

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