FX Strategists at UOB Group suggested the rally in USD/JPY could find a tough barrier in the 110.70 region.
24-hour view: “While USD closed at an 8-month high of 110.14, upward momentum has not improved by all that much. That said, there is scope for USD to continue to edge higher towards 110.40 (next resistance is at 110.65). Only a move back below 109.85 would indicate that the current mild upward pressure has eased (minor support is at 110.00).”
Next 1-3 weeks: “USD closed at an 8-month high of 110.14 yesterday (16 Jan). While upward momentum remains positive, the price action lacks ‘urgency’. However, as highlighted in recent updates, there is scope for the current USD strength to extend towards the next resistance at 110.67. The lack of ‘impulsiveness’ suggests USD may struggle to move clearly above this level. On the downside, a breach of 109.45 would indicate the current USD strength has run its course”.