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USD/JPY could still move higher, but a solid barrier awaits in the 108.50 region, suggested FX Strategists at UOB Group.

Key Quotes

24-hour view: “We highlighted yesterday that ‘the outlook is still mixed’ and expected USD to ‘trade within a broad range of 105.50/107.50’. USD posted a range of 105.82/107.86 before ending the day near the top of the range at 107.67. Upward momentum has improved somewhat and this could lead to a move above 108.00 but last Friday’s peak near 108.50 is solid resistance and is unlikely to yield so easily. Support is at 107.00 followed by 106.60.”

Next 1-3 weeks: “USD jumped to a high of 108.49 last Friday before opening on a weak note this morning. Despite last week’s strong gains and the improved upward momentum, we are not convinced that USD can continue to march higher from here. As highlighted lighted last Friday, ‘only a clear break above 109.00 would indicate the start of a direction move’. Meanwhile, USD could continue to trade in a volatile manner between 103.00 and 109.00 (range narrowed from 101.00/109.00).”