USD/JPY: Able to test 154.80 in short-term – UOB Group
The US Dollar (USD) is expected to trade in a range between 152.80 and 154.80. Weakness in USD appears to be stabilizing; a breach of 155.00 would indicate that USD is not declining further, UOB Group FX analysts Quek Ser Leang and Peter Chia note.
A breach of 155.00 to indicate USD has stabilized
24-HOUR VIEW: “We pointed out yesterday that ‘the impulsive momentum suggests further USD weakens, and support levels are at 152.50 and 152.00.’ USD subsequently fell to a low of 151.93 and then snapped back up to end the day largely unchanged (153.93, +0.04%). Oversold conditions, combined with tentative signs of slowing momentum suggest that USD is unlikely to weaken further. Today, we expect USD to trade in a range between 152.80 and 154.80.”
1-3 WEEKS VIEW: “Yesterday (25 Jul, spot at 153.30), we indicated that USD ‘remains weak, and the next level to monitor is at 152.00, followed by 151.30.’ USD then dropped below 152.00 before rebounding strongly from a low of 151.93. While further weakness is not ruled, the decline that started two weeks ago (as annotated in the chart below) appears to be stabilizing. However, only a breach of 155.00 (no change in ‘strong resistance’) would indicate USD is not declining further.”