USD/JPY: Expected to trade in a 149.20/150.55 range – UOB Group

US Dollar (USD) is expected to trade in a 149.20/150.55 range vs Japanese Yen (JPY). In the longer run, USD is likely to decline further; the significant support at 148.63 may not come into view so soon, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

USD is likely to decline further

24-HOUR VIEW: "When USD was at 151.30 yesterday, we noted 'an increase in momentum.' We highlighted that USD 'could drop below 151.00, but it remains to be seen if it can maintain a foothold below this level.' We added, 'the next support at 150.40 is unlikely to come under threat.' However, USD not only broke below 150.40 but also dropped further to 149.37.USD closed lower by a whopping 1.21% at 149.63. The outsized decline appears to be overdone, and USD is unlikely to decline much further. Today, we expect USD to trade in a 149.20/150.55 range."

1-3 WEEKS VIEW: "In our most recent narrative from Tuesday (18 Feb, spot at 151.45), we indicated that 'there has been a tentative buildup in downward momentum, but USD must break and remain below 151.00 before further weakness can be expected.' Yesterday, USD dropped decisively below 151.00 and staged a sharp and swift selloff that sent it to a low of 149.37. While USD is likely to decline further, short-term conditions are deeply oversold, and the significant support at 148.63 may not come into view so soon. The downside risk will remain intact as long as 151.80 (‘strong resistance’ level was at 152.30 yesterday) is not breached."