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USD/JPY could likely shift its attention to the 105.00 area in the next weeks, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: ” We highlighted yesterday USD ‘could break the strong resistance at 104.25 but the major level at 104.60 is likely out of reach’. Our view was not wrong as USD rose to 104.39 before easing off. While USD appears to be struggling to maintain a foothold at these levels, it is too early to expect a sustained pullback. For today, there is room for USD to edge higher but any advance is expected to face solid resistance at 104.60. Support is at 104.00 followed by 103.85.”

Next 1-3 weeks: “We highlighted last Friday (08 Jan, spot at 103.80) that USD is expected to trade on a firm footing and ‘a break of 104.25 could lead to a rapid rise to towards 104.60’. USD rose to a high of 104.39 yesterday (11 Jan). While shorter-term momentum appears to be overstretched, the overall outlook is still positive and a break of 104.60 would shift the focus to 105.00. All in, USD is expected to trade on a firm footing as long as it does not move below 103.50 (‘strong support’ level was previously at 103.00).”