The US Dollar (USD) could drop further to 160.20 before stabilisation can be expected. USD strength from the middle of last month has come to an end, and for the time being, the pair is likely to trade in a 159.40/161.80 range, UOB Group analysts note.
USD/JPY may drop to 160.20
24-HOUR VIEW: “Last Friday, we expected USD to trade in a 160.80/161.80 range. Our view was incorrect, as USD fell to a low of 160.33 before rebounding to close at 160.72 (-0.33%). Despite the rebound, the weakness in USD has not stabilised. Today, provided that USD remains below 161.15 (minor resistance is at 160.95), USD could drop further to 160.20 before stabilisation can be expected.”
1-3 WEEKS VIEW: ” We noted last Thursday (04 Jul, spot at 161.45) that ‘upward momentum is beginning to slow, but only a breach of 160.45 would suggest that USD is not strengthening further.’ On Friday, USD fell to a low of 160.33. The breach of our ‘strong support’ level of 160.45 indicates that the USD strength from the middle of last month has come to an end. The current price movements are likely part of a range trading phase. For the time being, USD is likely to trade between 159.40 and 161.80.”
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