The outlook is mixed. The US Dollar (USD) can trade in a volatile manner between 156.20 and 157.20. In the long term, the US dollar is likely to trade in a range between 155.60 and 157.50, UOB Group FX analysts Kwek Ser Liang and Peter Chia noted.
The USD/JPY pair is likely to trade within a range
24-hour view: “We mentioned yesterday that ‘an increase in momentum is likely to lead to further advance, but resistance at 157.50 is likely out of reach for now.’ The US dollar then rose to 157.29 and then, in a surprise move, fell to a low of 156.09 in the New York session. The US dollar rebounded from the bottom and continued to rebound in early Asian trade today. The US dollar will continue to trade in a volatile manner today, most likely between 156.20 and 157.20.”
1-3 week view: “Yesterday (Jan 05, spot at 157.05), we noted that the USD “faces moderate upward pressure and could drift higher and test 157.50”. We added, “To maintain moderate upward momentum, USD should not break below 156.35 (‘strong support’ level).’ However, after rising to a high of 157.29, the USD fell The US dollar rose sharply and broke below our “strong support” level (bottom at 156.09) and the moderate upward pressure has eased, hence we expect the US dollar to trade in a range likely between 155.60 and 157.50.”
