USD/JPY: To retest the 148.90 level - UOB Group

Room for US Dollar (USD) to retest the 148.90 level vs Japanese Yen (JPY) before stabilisation is likely; significant support at 148.63 is unlikely to come into view. In the longer run, USD is likely to decline further; the significant support at 148.63 may not come into view so soon, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

USD is likely to decline further

24-HOUR VIEW: "Following the steep drop in USD last Thursday, we indicated on Friday that 'the outsized decline appears to be overdone, and USD is unlikely to decline much further.' We expected USD to 'trade in a 149.20/150.55 range.' We did not anticipate the volatile price action as USD rose to 150.73 and then plummeted to a low of 148.90 before recovering to close lower by 0.23% at 149.29. While the decline still appears to be overdone, there is room for USD to retest the 148.90 before stabilisation is likely. The significant support level at 148.63 is unlikely to come into view. Resistance is at 149.75, followed by 150.10."

1-3 WEEKS VIEW: "Last Friday (21 Feb, spot at 149.60), we indicated that 'while USD is likely to decline further, short-term conditions are deeply oversold, and the significant support at 148.63 may not come into view so soon.' While USD subsequently plummeted to a low of 148.90, short-term conditions remain deeply oversold, and we continue to hold the same view. On the upside, should USD break above 151.05 ('strong resistance' level was at 151.80 last Friday), it would suggest that the weakness in USD from early last week has stabilised."