USD/JPY: Downward momentum is slowing – UOB Group
US Dollar (USD) is expected to trade in a 148.80/150.20 range. In the longer run, downward momentum is slowing; a breach of 150.20 would mean the weakness in USD has stabilised, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
Weakness in USD has stabilised
24-HOUR VIEW: "We indicated yesterday that the price movements in USD 'are likely part of a range trading phase, probably between 148.55 and 149.75.' We did not anticipate the volatile price action as USD fluctuated between 148.73 and 150.17. The choppy movements have resulted in a mixed outlook. Today, we expect USD to trade in a 148.80/150.20 range."
1-3 WEEKS VIEW: "We have been expecting a lower USD since the middle of the month. In our latest narrative from two days ago (26 Feb, spot at 149.15), we highlighted that 'although the USD weakness from early last week has not stabilised, oversold conditions suggest the pace of any further decline is likely to be slower.' We added, 'only a breach of 150.20 (‘strong resistance’ level) would indicate that the weakness has stabilised.' Yesterday, USD traded choppily, touching a high of 150.17. Downward momentum is slowing, and if USD breaks above 150.20, it would mean that the weakness has stabilised."
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