Sharp drop in US Dollar (USD) has scope to extend against Japanese Yen (JPY), 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/JPY has scope to extend

24-HOUR VIEW: "USD traded in a range of 146.96/147.88 two days ago. In the early Asian session yesterday, we highlighted that 'the price movements still appear to be part of a consolidation phase, likely between 146.90 and 148.00.' USD then fluctuated between 146.66 and 147.71 before settling at 147.10 (-0.17%). The price action provides no fresh clues, and we expect USD to trade in a range of 146.60/147.70 today."

1-3 WEEKS VIEW: "In our most recent narrative from Monday (04 Aug, spot at 147.25), we highlighted that 'the sharp drop in USD from last Friday has scope to extend.' However, we pointed out that 'any decline may not break below 145.80.' We continue to hold the same view. Overall, only a breach of 148.25 (‘strong resistance’ level was at 148.60) would indicate that the scope for the sharp drop to extend has faded."