Currency strategists at the UOB Group note that the USD / JPY faces stiff resistance at the 110.20 region in the short term.
24 hour view: “USD / JPY was trading between 109.32 and 109.95 yesterday before settling firm at 109.84. Momentum to the upside has improved somewhat and USD / JPY is likely to move higher, but a breakout of strong resistance at 110.20 is unlikely. Support is at 109.70, followed by 109.50. “
Next 1-3 weeks: “USD / JPY fell to 109.05 on Monday (July 19) before rebounding rapidly. While the downside momentum has eased, only a break out of the strong resistance at 110.20 would indicate that USD / JPY is unlikely. to weaken further. In order to rejuvenate the downside momentum, USD / JPY has to move and stay below 109.50 within these 1-2 days or a breakout of 110.20 would not be surprising. “