USD/JPY: May retest the 147.20 level – UOB Group
US Dollar (USD) may retest the 147.20 level against Japanese Yen (JPY); a sustained advance above this level seems unlikely. In the longer run, renewed momentum has increased the chance of further USD strength, but it must first close above 147.20 before a move to 147.60 is likely, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
Renewed momentum has increased the chance of further USD strength
24-HOUR VIEW: "USD rose to a high of 147.18 two days ago and then pulled back sharply. Yesterday, when USD was at 146.20, we highlighted the following: 'The pullback has scope to extend to 145.60 before stabilisation is likely. The strong support at 145.20 is unlikely to come under threat. Resistance is at 146.60, followed by 146.95.' Although USD pulled back further, it rebounded from a low of 145.73. The rebound is gathering momentum, and today, USD may retest the 147.20 level. A sustained advance above this level seems unlikely. Support is at 146.35, followed by 146.00."
1-3 WEEKS VIEW: "After holding a positive USD outlook since early this week, we pointed out yesterday (10 Jul, spot at 146.20) that 'upward momentum appears to be slowing, and if USD breaks below 145.20 (no change in ‘strong support’ level), it would mean that 147.18 is the extent of the current USD strength.' USD then dropped to a low of 145.73 before rebounding to close largely unchanged at 146.25 (-0.04%). In the early Asian trade today, USD rose sharply. The renewed upward momentum has increased the chance of further USD strength. However, USD must close above 147.20 before a move to 147.60 is likely. On the downside, the ‘strong support’ level has moved higher to 145.60 from 145.20."
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