Room for US Dollar (USD) to retest the 147.30 low vs Japanese Yen (USD); the next support at 147.00 is unlikely to come under threat. In the longer run, increase in downward momentum suggests USD could weaken to 147.00, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note.
USD can weaken to 147.00
24-HOUR VIEW: “Yesterday (Thursday), we indicated that Wednesday’s price action ‘has resulted in a slight increase in downward momentum.’ We expected USD to ‘edge lower,’ but we viewed ‘any weakness as a part of lower 148.00/150.00 range.’ However, USD broke decisively below 148.00, plunging to a low of 147.30. Despite rebounding from the low, the weakness in USD not quite stabilised. Today, there is room for USD to retest the 147.30 low. The next support at 147.00 is unlikely to come under threat. Resistance is at 148.35; a breach of 148.70 would indicate that the weakness has stabilised.”
1-3 WEEKS VIEW: “The following are excerpts from our update yesterday (06 Mar, spot at 149.25): ‘As highlighted, the recent failure to hold below 148.50 suggests USD could enter a period of indecision, trading in 148.00/151.50 for now. Looking ahead, should USD break decisively below 148.00, it could potentially trigger a sharp decline.’ We did not expect USD to easily breach 148.00 and plummet to 147.30. The price action has led to an increase in momentum. From here, we expect USD to weaken to 147.00, provided that the ‘strong resistance’ level, currently at 149.30, remains intact.”
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