United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that USD/JPY’s brief spike to 160.69 followed by a drop to 159.64 has left the intraday outlook mixed, with trading expected between 159.70 and 160.40. On a 1–3 week view, upward momentum has fizzled and downside momentum is only modest, so the pair is likely to stay confined to a 159.40–160.70 range for now.

Mixed signals after failed push higher

"24-HOUR VIEW: After USD edged higher as we expected two days ago, we highlighted yesterday that “upward momentum remains mild, and USD could continue to edge higher today, potentially testing 160.75.” We added, “support is at 160.35, followed by 160.20.” However, USD did not test 160.75, only reaching a high of 160.69. During the NY session, USD plunged to 159.64 and then snapped back up. The outlook is mixed after the sharp but short-lived swings. Today, USD could trade between 159.70 and 160.40."

"1-3 WEEKS VIEW: On Monday (08 Jun, spot at 160.25), we highlighted that “upward momentum is building, albeit tentatively,” and USD “could rise gradually, and the level to watch is 160.75.” Yesterday, USD rose to a high of 160.59 and then fell and broke below our ‘strong support’ level at 160.00 (low was 159.64). Upward momentum has fizzled out. Downward momentum is increasing but not enough to indicate a continued decline. For the time being, USD is likely to trade in a range between 159.40 and 160.70."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)