USD/JPY could see its downside pressure gather some traction in the short term, comment UOB Group’s Markets Strategist Quek Ser Leang and Rates Strategist Victor Yong.

Key Quotes

24-hour view: “Yesterday, we held the view that ‘USD weakness is likely to extend but a sustained drop below 145.00 is unlikely’. While our view was not wrong as USD dropped to 145.10, we did not expect the strong rebound from the low (high has been 146.92). The rebound appears to be running ahead of itself and USD is unlikely to advance much further. For today, USD is more likely to trade sideways within a range of 145.55/147.05.”

Next 1-3 weeks: “We highlighted yesterday (27 Oct, spot at 146.05) that downward momentum is building tentatively and that USD could edge lower but the odds of a sustained decline below 144.00 are not high. There is no change in our view. On the upside, a break of the ‘strong resistance’ at 148.80 (no change in level from yesterday) would indicate the build-up in momentum has fizzled out.”