USD/JPY: Any further decline is unlikely to reach 145.80 – UOB Group

US Dollar (USD) could drop below last week’s low of 146.60; any further decline is unlikely to reach 145.80. In the longer, USD view is negative, but it is uncertain for now whether it has enough momentum to reach 145.80, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

USD view is negative

24-HOUR VIEW: "Although we indicated yesterday that 'the bias for USD is tilted to the downside,' we stated that 'the major support at 147.20 is unlikely to come under threat.' We were correct on the first point, but not on the latter, as USD dropped to a low of 147.07. USD continues to drop in the early Asian trade today. Given the increasing momentum, a break below last week’s low of 146.60 will not be surprising. That said, any further decline is unlikely to reach the significant support level of 145.80. On the upside, any recovery is likely to hold below 147.65 (minor resistance is at 147.35)."

1-3 WEEKS VIEW: "Two days ago (12 Aug, spot at 148.25), we revised our view from negative to neutral. We stated that USD 'is likely to trade in a range, probably between 147.20 and 149.20.' In hindsight, the shift in view was premature, as USD dropped sharply to a low of 147.07 yesterday. While we are revising our view back to negative, it is uncertain for now whether USD has enough momentum to reach the significant support level at 145.80. We will maintain our negative view as long as 147.95 (‘strong resistance’ level) is intact."