The continuation of the downtrend in USDJPY should not be ruled out in the near term, suggest UOB Group’s Economist Lee Sue Ann and Markets Strategist Quek Ser Leang.

Key Quotes

24-hour view: “We highlighted yesterday that USD “could continue to trade in a volatile manner between 138.35 and 140.35”. USD subsequently traded within a narrower range than expected (138.72/140.29). The price actions are likely part of a consolidation and we expect USD to trade within a range of 138.90/140.20 today.”

Next 1-3 weeks: “There is not much to add to our update from yesterday (16 Nov, spot at 139.35). As highlighted, further USD weakness is not ruled out, but the solid support at 137.60 may not come into view so soon, if at all. On the upside, a break of 140.80 (no change in ‘strong resistance’ level from yesterday) would indicate that USD is unlikely to weaken further.”