USD/JPY: Likely to consolidate in a range of 142.90/144.30 – UOB Group

US Dollar (USD) is likely to consolidate in a range of 142.90/144.30 against Japanese Yen (JPY). In the longer run, further declines are not ruled out, but USD may consolidate for a couple of days first, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.

Further declines are not ruled out

24-HOUR VIEW: "Yesterday, we expected USD to break below 143.50. However, we highlighted that 'any further decline is unlikely to reach 142.70.' While our view was correct, USD fell more than expected to 142.66 before rebounding strongly to close at 143.43, down 0.40%. The rebound in oversold conditions indicates that, instead of weakening, USD is more likely to consolidate in a range of 142.90/144.30 today."

1-3 WEEKS VIEW: "We revised our USD view to negative yesterday (01 Jul, spot at 143.80), indicating that 'downward momentum is beginning to build, and a break of 143.50 could trigger further declines toward 142.70.' We did not expect USD to reach 142.70 so soon, as it dropped to a low of 142.66. While further declines are not ruled out, USD may consolidate for a couple of days first before heading lower. However, should USD break above 144.85 (no change in ‘strong resistance’ level from yesterday), it would indicate that it is not declining further. Looking ahead, the next level to monitor below 142.65 is 142.10."