USD/JPY: Major support at 141.70 is unlikely to come under threat – UOB Group
US Dollar (USD) could edge lower and retest the 142.20 level vs Japanese Yen (JPY); the major support at 141.70 is unlikely to come under threat. In the longer run, risk is still on the downside, but it remains to be seen if USD can maintain its pace of decline. The level to monitor is 141.70, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Risk is still on the downside
24-HOUR VIEW: "USD fell to a low of 142.41 last Friday. Yesterday, when USD was at 142.75, we indicated that 'despite the decline, downward momentum has not increased significantly.' We also indicated that 'there is scope for USD to weaken further, but any decline is likely part of a lower range of 142.10/143.45.' USD then traded in a narrower range than expected, dipping to 142.20 before rebounding to 143.08. There has been no increase in downward momentum, but the underlying tone still appears soft. Today, USD could edge lower and retest the 142.20 level. A breach of this level is not ruled out, but any further decline is unlikely to threaten the major support at 141.70. On the upside, resistance levels are at 143.10 and 143.45."
1-3 WEEKS VIEW: "We highlighted yesterday that 'the risk is still on the downside, but it remains to be seen if USD can maintain its pace of decline.' We also highlighted that 'the level to monitor is 141.70' and 'a breach of 144.00 (‘strong resistance’ level) would suggest the weakness has stabilised.' Our update is still valid."
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