The US Dollar (USD) experienced a dramatic plunge after a surge on Wednesday, leaving the outlook for USD/JPY unclear. OCBC analysts predict continued choppiness in the short term, with USD likely trading between 152.00 and 154.00. The long-term outlook suggests a consolidation within the 151.00/155.00 range.
Following a sharp surge in the US Dollar (USD) on Wednesday, it experienced a significant plunge on Thursday, giving up almost all of its previous day's gains. The rapid swings in price action have left the outlook for USD/JPY unclear. While USD reached a high of 154.66, it subsequently dropped to a low of 152.68. Analysts at OCBC , Frances Cheung and Christopher Wong, predict that USD will likely trade in a choppy manner between 152.00 and 154.00 today.
On Thursday, analysts had indicated that the rally in USD appeared overdone and that consolidation between 153.30 and 154.85 was more likely. However, the unexpected price drop has changed the near-term outlook. Despite the recent volatility, upward momentum for USD has largely faded, according to OCBC's analysts. Looking at a 1-3 week horizon, the analysts previously noted that while USD could continue to rise, deeply overbought conditions suggested any advance might not reach the major resistance at 155.80. They also highlighted that a breach of 152.50 would indicate that USD was not rising further. While the 'strong support' level at 152.50 has not been breached yet, the significant drop in USD suggests a potential shift in the broader trend. For the time being, USD is likely to trade within a range of 151.00/155.00
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