USD/JPY could now attempt some consolidation within the 143.50-146.20 range in the next few weeks, comment Economist Lee Sue Ann and Markets Strategist Quek Ser Leang at UOB Group.

Key Quotes

24-hour view: We did not expect the sharp drop in USD to a low of 144.53 (we were expecting it to trade sideways). Downward momentum has increased, albeit not much. Today, there is room for USD to weaken further, even though it is unlikely to reach the major support at 143.50. Note that there is another support at 144.10). Resistance is at 145.20, followed by 145.65.

Next 1-3 weeks: After USD rebounded from 144.92, we highlighted on Tuesday (22 Aug, spot at 146.20), “there is hardly any increase in momentum.” We held the view that while USD could rise, “it remains to be seen if there is enough momentum to carry it to the next major resistance at 147.50.” Yesterday, USD fell sharply to a low of 144.53. While our ‘strong support’ level at 144.50 has not been clearly breached, the mild upward momentum has fizzled out. From here, USD is likely to trade in a range, likely between 143.50 and 146.20