USD/JPY: Downside momentum alleviated above 110.20 – UOB

UOB Group’s FX Strategists note USD/JPY faces a tough resistance in the 110.20 region in the near term.

Key Quotes

24-hour view: “USD traded between 109.32 and 109.95 yesterday before settling on a firm note at 109.84. Upward momentum has improved a tad and USD is likely to edge higher but a break of the strong resistance at 110.20 is unlikely. Support is at 109.70 followed by 109.50.”

Next 1-3 weeks: “USD dropped to 109.05 on Monday (19 Jul) before rebounding quickly. While downward momentum has eased, only a break of the strong resistance at 110.20 would indicate that USD is unlikely to weaken further. In order to rejuvenate the flagging downward momentum, USD has to move and stay below 109.50 within these 1 to 2 days or a break of 110.20 would not be surprising.”