USD/JPY: Any decline is likely part of a lower range of 142.10/143.45 – UOB Group
Scope for US Dollar (USD) to weaken further vs Japanese Yen (JPY); any decline is likely part of a lower range of 142.10/143.45. In the longer run, risk is still on the downside, but it remains to be seen if USD can maintain its pace of decline. The level to monitor is 141.70, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Risk is still on the downside
24-HOUR VIEW: "Last Friday, we expected USD to consolidate between 143.40 and 144.70. However, USD fell and reached 142.41. Despite the decline, downward momentum has not increased significantly. Today, while there is scope for USD to weaken further, any decline is likely part of a lower range of 142.10/143.45. In other words, USD is unlikely to break clearly below 142.10."
1-3 WEEKS VIEW: "We revised our USD to negative in the middle of last week. On Friday (23 May, spot at 143.95), we highlighted the following: 'While further declines remain possible, deeply oversold conditions and tentative slowing of downward momentum could first lead to consolidation. That said, yesterday’s low near 142.80, is now acting as a strong support level. On the upside, a break above 145.05 (‘strong resistance’ level) would indicate a broader and longer consolidation phase.' We did not expect USD to quickly resume its decline, dropping to a low of 142.41. The risk is still on the downside, but it remains to be seen whether USD can maintain the current pace of decline. The level to monitor is 141.70. On the upside, a breach of 144.00 (‘strong resistance’ level previously at 145.05) would suggest the weakness has stabilised."
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FXStreet Insights Team
FXStreet
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