Additional US Greenback (USD) energy is just not dominated out towards Japanese Yen (USD); any advance is probably going half of a better vary of 146.75/147.60. Within the longer run, USD view stays constructive; overbought situations counsel a slower tempo of advance, and 148.05 might not come into the image so quickly, UOB Group’s FX analysts Quek Ser Leang and Peter Chia be aware.
USD view stays constructive
24-HOUR VIEW: “USD fell to a low of 145.73 final Thursday after which rebounded. On Friday, when USD was at 146.70, we have been of the view that it ‘might retest the 147.20 degree.’ Nevertheless, we identified that ‘a sustained advance above this degree appears unlikely.’ The next advance exceeded our expectation, as USD soared to a excessive of 147.51 earlier than closing up by 0.79% at 147.40. Whereas additional USD energy is just not dominated out, any advance is probably going half of a better vary of 146.75/147.60. In different phrases, USD is unlikely to interrupt clearly above 147.60 or under 146.75.”
1-3 WEEKS VIEW: “We’ve got seen USD positively since early final week. After USD dropped to 145.73 and rebounded, we indicated final Friday ‘the renewed upward momentum has elevated the possibility of additional USD energy.’ Nevertheless, we famous that USD ‘should shut above 147.20 earlier than a transfer to 147.60 is probably going.’ We didn’t anticipate USD to then simply break above 147.20, because it soared to a excessive of 147.51. Whereas we preserve our constructive view, overbought situations counsel a slower tempo of advance, and the subsequent main resistance at 148.05 (close to final month’s excessive) might not come into the image so quickly. Nevertheless, if USD breaks under 146.30 (‘robust assist’ degree beforehand at a a lot decrease degree of 145.60), it will imply that USD is just not strengthening additional.”
