USD/JPY: Likely to trade between 147.50 and 148.80 – UOB Group
Sharp fluctuations have resulted in a mixed outlook; US Dollar (USD) could continue to fluctuate against Japanese Yen (JPY), likely between 147.50 and 148.80. In the longer run, USD strength has paused for now; it is expected to trade in a range of 146.90/149.20, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
USD strength has paused for now
24-HOUR VIEW: "Subsequent to the sharp rally in USD on Tuesday, we indicated the following yesterday: 'Conditions are deeply overbought, and today, while there is room for USD to rise further, a sustained break above 149.30 is unlikely.' We did not expect the volatile price movements, as after rising to a high of 149.18, USD plunged to 146.90 before snapping back up to close at 147.86 (-0.67%). The sharp fluctuations have resulted in a mixed outlook. Today, USD could continue to fluctuate, likely between 147.50 and 148.80.
1-3 WEEKS VIEW: "We turned positive on USD early last week (see annotations in the chart below). After USD soared to a high of 149.01 two days ago, we pointed out yesterday (16 Jul, spot at 148.80) that 'although conditions remain overbought, strong momentum may continue to carry USD higher.' We added, 'the next level to monitor is 149.80 and to sustain the overbought momentum, USD must hold above 147.65 (‘strong resistance’ level).' We did not expect USD to plunge briefly to 146.90 and the subsequent sharp rebound. The breach of our ‘strong support’ level indicates USD strength has paused for now. From here, we expect USD to trade in a range of 146.90/149.20."
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FXStreet Insights Team
FXStreet
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