USD/JPY could slip back to the 113.00 zone in case 113.40 is breached, noted FX Strategists at UOB Group.

Key Quotes

24-hour view: “Our view from last Friday (21 Jan, spot at 113.90) still stands. As highlighted, while shorter-term downward momentum has improved, USD has to break 113.40 before a decline to 113.00 is likely. The chance for USD to break 113.40 is not high but it would remain intact as long as USD does not move above 114.45 (no change in ‘strong resistance level’).”

Next 1-3 weeks: “USD traded between 113.65 and 114.14 yesterday, slightly narrower than our expected sideway-trading range of 113.65/114.20. Despite the relatively quiet trading, the underlying tone appears to have weakened somewhat. While USD could dip below 113.60, the major support at 113.40 is unlikely to come under threat. Resistance is at 113.95 followed 114.15.”