USD/JPY has a chance to retest the 148.55 level - UOB Group

Chance for US Dollar (USD) to retest the 148.55 level vs Japanese Yen (JPY); a sustained break below this level is unlikely. In the longer run, USD weakness has not stabilised; pace of any further decline is likely slower. The next level to monitor is 147.70, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

USD weakness has not stabilised

24-HOUR VIEW: "Following USD sharp rebound from a low of 148.63 two days ago, we highlighted yesterday that USD 'could rebound further, but any advance is unlikely to break above 150.55.' We were not wrong as USD rebounded to a high of 150.30. However, we did not anticipate the sharp selloff from the high, as USD plummeted to a low of 148.56 before rebounding to close at 149.02 (-0.46%). Despite the sharp drop from the high, there has been no significant increase in momentum. That said, as long as 149.70 (minor resistance is at 149.45) is not breached, there is a chance for USD to retest the 148.55 level. Given that momentum is not strong, a sustained break below this level is unlikely."

1-3 WEEKS VIEW: "We turned negative in USD early last week. After USD dropped to 148.63 and rebounded, we indicated yesterday (25 Feb, spot at 149.90) that 'downward momentum has slowed.' We also indicated that 'as long as 151.05 ('strong resistance' level) is not breached, there is still a slim chance for USD to drop to 148.63.' The subsequent price movements came as a surprise, as USD lurched lower during the NY session and reached a low of 148.56. Although the USD weakness has not stabilised, oversold conditions suggest the pace of any further decline is likely to be slower. The next level to monitor is 147.70. On the upside, the 'strong resistance' has
moved lower to 150.55 from 151.05."