USD/JPY risks a deeper retracement – UOB
Further weakness could put USD/JPY under extra downside pressure in the near term, suggest Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.
Key Quotes
24-hour view: We expected USD to trade in a range of 147.00/148.50 last Friday. Instead of trading in a range, USD fell sharply to a low of 146.65. USD continues to weaken in early Asian trade today. The rapid increase in momentum is likely to lead to USD dropping to 146.00. The next major support at 145.05 is highly unlikely to come under threat. Resistance is at 146.80, followed by 147.20.
Next 1-3 weeks: Last Friday (01 Dec, spot at 147.85), we highlighted that USD “is likely to trade in a range between 146.65 and 149.30 before heading lower at a later stage.” However, USD dropped quickly to a low of 146.65 in late-NY trade. USD continues to decline in early Asian trade. The price action suggests the USD weakness has resumed earlier than expected. The level to watch is at 146.00. A breach of this major support will shift the focus to 145.05. In order to keep the momentum going, USD must stay below 148.10.