Bank of America Global Research discusses USD/JPY technical outlook and sees a scope for a bearish pattern whilst below 110.33.
"USD/JPY has been grinding higher between converging trend lines which often times represents a trend continuation pattern. The trend preceding this grind was down from the April high of 110.97. A break below technical supports from 109.14-109.25 indicates a decline to about 106.71-106.79 will follow. The timing for this dovetails nicely with the narrow cloud juncture and technical breaks in US rates," BofA notes.
"The Ichimoku cloud is often considered support and resistance. A thinner cloud represents less support for price when declining. Bullish technical breaks in US treasuries (lower 10Y yield) tends to correlate with lower USD/JPY. USD/JPY above 110.33 would question this view," BofA adds.