US Dollar (USD) is likely to trade in a 142.70/144.55 range vs Japanese Yen (JPY). In the longer run, USD could continue to decline, but given the deeply oversold conditions, it remains to be seen if 139.55 is within reach, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
USD can also continue to decline
24-HOUR VIEW: “Last Friday, USD plummeted to 142.05 before rebounding sharply. Yesterday (Monday), we indicated that ‘the rebound in deeply oversold conditions suggests USD is unlikely to weaken further.’ We expected USD to ‘trade in a 142.30/144.30 range.’ Our view of range-trading was not wrong, even though USD traded in a narrower range than expected (142.23/144.08). The price movements still appear to be part of a range-trading phase. Today, we expect USD to trade in a 142.70/144.55 range.”
1-3 WEEKS VIEW: “Our update from yesterday (14 Apr, spot at 143.70) still stands. As highlighted, USD ‘could continue to decline, but given the deeply oversold conditions, it remains to be seen if 139.55 is within reach.’ Overall, only a breach of 145.00 (‘strong resistance’ level was at 145.50 yesterday) would mean that the USD weakness that started early this month (see annotations in the chart below) has stabilised.”
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