There may be room for US Greenback (USD) to rise additional in opposition to Japanese Yen (JPU), however any advance is probably going a part of a 147.25/148.25 vary. Within the longer run, upward momentum is beginning to construct, however USD should first shut above 148.25 earlier than a sustained rise might be anticipated, UOB Group’s FX analysts Quek Ser Leang and Peter Chia notice.
Upward momentum is beginning to construct
24-HOUR VIEW: “Final Thursday, USD dropped to 145.82 after which rebounded strongly. On Friday, we indicated that USD ‘might rebound additional, however any advance is probably going half of a better vary of 146.50/147.45.’ Our view for USD to rebound additional was not unsuitable, however our expectation that any advance is a part of a 146.50/147.45 vary was incorrect. USD broke above 147.45 and reached a excessive of 147.94 earlier than closing at 147.66 (+0.45%). Immediately, there may be room for USD to rise additional, however this time round, any advance is probably going a part of a 147.25/148.25 vary. In different phrases, USD is unlikely to interrupt clearly above 148.25.”
1-3 WEEKS VIEW: “We indicated final Wednesday (23 Jul, spot at 146.60) that USD ‘might weaken to 145.75’. After USD dropped to 145.82 and rebounded, we identified final Friday (25 Jul, spot at 147.00) that ‘downward momentum is displaying early indicators of slowing and will USD break above 147.60 (‘sturdy resistance’ degree), it could imply that 145.82 is the extent of the present weak point.’ USD then not solely broke above 147.60 but additionally rose additional to a excessive of 147.94. Downward momentum has pale. Upward momentum is beginning to construct, however it isn’t sturdy sufficient to point a sustained rise simply but. For a continued advance, USD should first shut above 148.25. The probability of USD closing above 148.25 will stay intact so long as 146.65 (‘sturdy assist’ degree) just isn’t breached. Trying forward, if USD had been to interrupt clearly above 148.25, it might probably result in a transfer towards 149.20.”
