USD/JPY: Likely to consolidate between 147.00 and 148.20 - UOB Group

The current price movements are likely part of a consolidation phase between 147.00 and 148.20. In the longer run, sharp drop in USD has scope to extend, but any decline may not break below 145.80, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.

Sharp drop in USD has scope to extend

24-HOUR VIEW: "Two days ago, we expected USD to weaken, but we pointed out that 'it remains to be seen whether it can reach 146.60.' After USD dropped to a low of 146.85, we indicated yesterday that USD 'could break below 146.60, but the major support at 145.80 is unlikely to come into view.' The subsequent price movements did not turn out as we expected. USD dipped briefly to 146.60 and then rebounded to a high of 147.83. Despite the rebound, there has been no clear increase in upward momentum. The current price movements are likely part of a consolidation phase, probably between 147.00 and 148.20."

1-3 WEEKS VIEW: "We continue to hold the same view as Monday (04 Aug, spot at 147.25). As highlighted, 'the sharp drop in USD from last Friday has scope to extend, but any decline may not break below 145.80.' We continue to hold the same view. Overall, only a breach of 149.00 (with no change in 'strong resistance' level) would indicate that the scope for the sharp drop to extend has faded."