Japanese Yen Likely to Extend Gains Against US Dollar: UOB

156.00 and 155.50 remain the support levels in the 1–3 week USD/JPY outlook. United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann point to strong downward momentum following the pair’s sharp slide. Oversold conditions are expected to give way to intraday consolidation between 156.50 and 157.50, but the 1–3 week bias remains towards further losses. Over the longer term, risks remain tilted towards additional weakness towards January’s low of 152.08.

156.00 support in focus as Dollar-Yen remains under pressure

"24-HOUR VIEW: USD plunged last Thursday. When it was at 156.60 on Friday, we highlighted the following: “While deeply oversold, the decline could extend to 156.00 before stabilisation can be expected. The next support at 155.50 is likely out of reach for now.” USD then declined to 156.06 and rebounded. USD closed little changed at 156.86 (+0.06%). The immediate downward pressure appears to have eased. Today, we expect USD to consolidate, most likely between 156.50 and 157.50."

"1-3 WEEKS VIEW: After the steep decline in USD last Thursday, we highlighted last Friday (23 Oct, spot at 156.60) that “the rapid increase in downward momentum suggests USD is likely to decline further.” We added, “support levels are 156.00 and 155.50.” We will continue to hold the same view as long as USD holds below 157.80 (no change in ‘strong resistance’ level)."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)