USD/JPY: Downward momentum is beginning to ease - UOB Group

After the sharp swings, the outlook is unclear; USD could trade in a range of 145.40/148.50. In the longer run, downward momentum is beginning to ease; a breach of 148.50 would indicate that the weakness in USD has stabilised, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

USD can trade in a range of 145.40/148.50

24-HOUR VIEW: "We noted yesterday that USD 'has gathered momentum,' but we were of the view that it 'might not be able to break below 145.00.' USD weakened more than expected, plummeting to a low of 143.98 and then rallied sharply during the NY session (high was 148.27). After the sharp swings, the outlook is mixed. Today, USD could trade in a range of 145.40/148.50."

1-3 WEEKS VIEW: We have held a negative USD view since early this month. In our latest narrative from two days ago (08 Apr, spot at 147.50), we pointed out that 'the oversold weakness in USD has not stabilized.' We indicated that 'there is a chance for USD to drop below 145.00 again before the risk of another rebound increases.' Yesterday, USD dropped to 143.98 before rebounding strongly. Downward momentum is beginning to ease, and a breach of 148.50 (no change in 'strong resistance' level) would indicate that the weakness in USD has stabilised. Until then, there is a small chance for USD to retest the 144.00 level."