USD/JPY: Likely to trade in a range between 146.00 and 149.00 – UOB Group

US Dollar (USD) is likely to trade in a range between 146.00 and 149.00 vs Japanese Yen (JPY). In the longer run, oversold weakness has not stabilized; there is a chance for USD to drop below 145.00 again before the risk of another rebound increases, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Oversold weakness has not stabilized

24-HOUR VIEW: "USD traded on a soft note upon opening yesterday before rebounding to end the day higher by 0.64% at 147.84. The price action is likely part of a range-trading phase, probably between 146.00 and 149.00."

1-3 WEEKS VIEW: "In our most recent narrative from last Friday (04 Apr, spot at 146.30), we indicated that 'despite being deeply oversold, it is too early to expect the weakness to stabilise.' We also indicated that 'the 145.00 level is a significant support and USD must break and hold below this level before further decline is likely.' USD subsequently dropped to 144.54 and then rebounded. While the oversold weakness still has not stabilised, as USD did not close below 145.00, there has been no further increase in downward momentum. However, provided that 149.00 (‘strong resistance’ level) is not breached, there is a chance for USD to drop below 145.00 again before the risk of another rebound increases. At this time, the likelihood of USD breaking the significant mid-term support at 143.50 is not high."