USD/JPY: Set to drop below 153.85 – UOB Group

Chance for US Dollar (USD) to drop below 153.85; the major support at 153.20 is unlikely to come under threat. In the longer run, pullback in USD could extend to 153.20, UOB Group’s FX analysts Quek Ser Leang and Lee Sue Ann note.  

Pullback in USD could extend to 153.20

24-HOUR VIEW: “Last Friday, we were of the view that USD ‘is likely to continue to rise.’ Our view was incorrect, as after rising to a high of 156.74, USD plunged to a low of 153.85. USD closed sharply lower by 1.22% at 154.34. While the sharp and swift sell-off appears to be overdone, there is a chance for USD to drop below 153.85 before stabilisation can be expected. The major support at 153.20 is unlikely to come under threat. Resistance is at 154.80; a breach of 155.25 would suggest the weakness in USD has stabilised.”

1-3 WEEKS VIEW: “When USD was at 156.50 last Friday (15 Nov), we indicated that ‘Momentum remains strong, and the next technical objective is at 158.00.’ USD then rose to 156.74 and then in a sudden move, plunged to a low of 153.85. The breach of our ‘strong support’ level at 154.95 indicates that the USD advance from the middle of last week has ended. The current price action is likely part of a pullback that could extend to 153.20. The downward pressure would remain intact as long as 155.80 is not breached.”