USD/JPY: Likely to trade in a range of 146.30/147.35 – UOB Group

FXStreet Insights Team FXStreet

US Dollar (USD) is likely to trade in a range of 146.30/147.35. In the longer run, downward momentum has slowed, but there is a slim chance for USD to revisit the 145.45 level, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Downward momentum has slowed

24-HOUR VIEW: "Yesterday, when USD was at 146.35, we indicated that 'strong downward momentum may lead to further USD weakness, possibly toward 145.85.' We highlighted that 'to sustain the downward momentum, USD must not break above 146.90, with minor resistance at 146.60.' We did not anticipate the volatile price movements, as USD plunged to a low of 145.47 and then snapped back, reaching a high of 147.05. While there has been a build-up in upward momentum, this is likely to lead to a higher range of 146.30/147.35. In other words, USD is unlikely to break clearly above 147.35."

1-3 WEEKS VIEW: "Yesterday (17 Aug, spot at 146.35), we revised our USD outlook to negative, indicating that 'the sharp increase in short-term downward momentum suggests USD could weaken to 145.85.' We did not anticipate the sharp drop that sent USD to a low of 145.47. USD rebounded strongly from the low to close on a firm note at 146.97 (+0.33%). While downward momentum has slowed with the strong rebound, only a breach of 147.35 (no change in ‘strong resistance’ level) would indicate that USD has moved back into a range-trading phase. Until then, there is a slim chance for USD to revisit the 145.45 level."

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