The Dollar reversed all of its gains against the Yen as uncertainty prevails just before the critical Fed’s monetary policy meeting where forward guidance and economic projections will be the key to follow given the consensus of 0.25% rate cut become a well-known fact. The latest risk-on sentiment is mainly backed by expectations of the late-September trade meeting of the US-Japan leaders and the early-October with China. However, all of that will likely change if the Fed cut rates more than expectations, as the market will likely chose to sell the greenback and buy safe haven assets, such as the anti-risk Yen.
The Dollar bulls attempted to break above 108.30 during yesterday’s session but failed to do so as the market lacked enough momentum. Price is currently trading in a tight level between 108 and 108.30, but today’s Fundamental catalyst will likely push market participants to breakout from this range. A break above 108.30 will push the dollar to advance towards 108.50, and on the other hand, a break below 108, the pair will probably pullback towards 107.50.
Support: 108 / 107.50
Resistance: 108.30 / 108.50