Below 147.00, further declines are likely – UOB Group

Slowing momentum suggests any decline in US Dollar (USD) is unlikely to reach 147.00 again vs Japanese Yen (JPY). In the longer run, technical target met sooner than expected; USD need to remain below 147.00 before further declines are likely, UOB Group’s FX analysts Quek Ser Leang and Peter Chia note. 

Resistance levels are at 147.90 and 148.20

24-HOUR VIEW: “Last Thursday, USD dropped to 147.30 and then rebounded. On Friday, we indicated that ‘there is room for USD to retest the 147.30 low.’ We added, ‘The next support at 147.00 is unlikely to come under threat.’ USD fell more than expected to 146.95, rebounding strongly to close largely unchanged at 148.03 (+0.05%). Although USD traded on a soft note in early Asian trade today, slowing downward momentum suggests any decline is unlikely to reach 147.00 again (there is another support level at 147.20). On the upside, resistance levels are at 147.90 and 148.20.” 

1-3 WEEKS VIEW: “We revised our view to negative last Friday (07 Mar, spot at 148.00). We indicated that ‘increase in momentum suggest USD could weaken to 147.00.’ We did not expect USD to reach the technical target so quickly, as it dropped to 146.94 and then rebounded. While further USD weakness is not ruled out, the 147.00 level is acting as a kind of ‘low water mark’ now, meaning USD would need remain below this level before further declines are likely. It is unclear for now if USD can remain below 147.00, but the probability of such a move will remain intact provided that 148.80 (‘strong resistance’ level was at 149.30 last Friday) is not breached.”