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In view of FX Strategists at UOB Group, USD/JPY could now attempt an assault of the key resistance area around 108.50.

Key Quotes

24-hour view: “We held the view that USD could “test 108.20 first before a deeper pull-back can be expected”. USD subsequently rose to 108.17 before ending the day at 108.07. The underlying tone has improved and this could lead to USD testing the next resistance at 108.30. For today, a break of last month’s 108.47 peak appears unlikely. On the downside, a break of 107.90 would indicate that the current mild upward pressure has eased”.

Next 1-3 weeks: “USD came close to the top of our expected sideway trading range of 107.00/108.20 as it touched 108.17 yesterday. The firm daily closing of 108.06 (+0.12%) has resulted in an improved underlying tone. From here, instead of “trading sideways”, USD could test the major 108.50 level. For now, the prospect for a sustained rise above this level is not high but it would continue to improve as long as USD does not move back below 107.60 within these few days”.