The US Dollar (USD) is likely to trade in a sideways range of 140.10-141.40 against the Japanese Yen (JPY), UOB Group FX strategists Quek Ser Leang and Lee Sue Ann note. In the longer run, downward momentum has not increased much, they say, adding that the USD could continue to weaken but that it remains to be seen if 139.00 is within reach.

USD could continue to weaken towards 139.00

“USD fell below 140.00 yesterday, reaching a 14-month low of 139.56. USD rebounded strongly from the low to close slightly lower at 140.60 (-0.16%). The rebound in severely oversold conditions and slowing momentum indicates that instead of continuing to weaken, USD is more likely to trade sideways. Expected range for today: 140.10-141.40.”

“While USD fell and broke below the round-number support of 140.00 yesterday (low of 139.56), downward momentum has not increased much. However, the weakness has not stabilised, and USD could continue to weaken even though it remains to be seen if 139.00 is within reach this time round. On the upside, a breach of 142.20 would indicate that the weakness has stabilised.”