Japanese Yen: Upside risks after sharp rebound against US Dollar – UOB
UOB’s Quek Ser Leang highlights that USD/JPY’s unexpected plunge to 160.62 has shifted the short-term bias lower, even as oversold conditions suggest scope for a rebound within 160.80–161.90 intraday. Over one to three weeks, further downside toward 160.00 is possible only if the pair closes below 160.60, with strong resistance now around 162.45.
Oversold bounce within broader downside risk
"24-HOUR VIEW: The following are excerpts from our update yesterday: “There has been a slight increase in downward momentum, and the bias for USD today is tilted to the downside. That said, any decline is likely to be contained within a range of 162.20/162.75. USD is unlikely to break clearly below 162.20.” We did not expect the steep selloff that sent USD to a low of 160.62. USD rebounded from the low to close at 161.09 (-0.90%). The rebound from deeply oversold conditions suggests USD is unlikely to weaken further. Today, USD could rebound further, but this time around, any advance is likely to be contained within a range of 160.80/161.90."
"1-3 WEEKS VIEW: Tracking our positive USD view from the middle of last month, we indicated two days ago (01 Jul, spot at 162.60) that “the risk remains on the upside, and the next level to watch is 163.00.” USD subsequently rose to 162.83, but in a sudden move yesterday, it plunged below our ‘strong support’ level at 161.80 (low was 160.62). While the sharp decline suggests further downside risk, USD must close below 160.60 before a move to 160.00 can be expected. The likelihood of USD closing below 160.60 will remain intact as long as 162.45 (‘strong resistance’ level) is not breached."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
