USD/JPY: Sharp drop in USD has scope to extend – UOB Group
Further US Dollar (USD) weakness seems likely against Japanese Yen (JPY); it remains to be seen whether it can reach 146.60. In the longer run, sharp drop in USD has scope to extend, but any decline may not break below 145.80, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Any decline may not break below 145.80
24-HOUR VIEW: "USD traded in a volatile manner last Friday, plunging to a low of 147.28 before closing sharply lower by a whopping 2.24% (147.36). Although further USD weakness seems likely, conditions are deeply oversold, and it remains to be seen whether USD can reach the 146.60. Based on the oversold conditions, the major support at 145.80 is unlikely to come under threat. Resistance levels are at 147.65 and 148.50."
1-3 WEEKS VIEW: "After holding a positive USD view for several days, in our previous update from last Thursday (31 Jul, spot at 149.30), we indicated that 'USD view remains positive, and the focus now is at 150.00.' We added, 'if USD breaks below the ‘strong support’ at 148.20, it would indicate that it is not rising further.' On Friday, USD rose to a high of 150.91, and then in a dramatic reversal, it plunged and closed down by an outsized 2.24% (NY close of 147.36), marking its biggest one-day drop since Dec 2023. The sharp drop has scope to extend, but any decline may not break below 145.80. On the upside, a breach of 149.50 would indicate that the current downward pressure has eased."
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FXStreet Insights Team
FXStreet
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