The Japanese Yen advanced over the Dollar after the BOJ kept its monetary policy on hold but announced that it would review its monetary policy next month amid mounting risk to the economic recovery, somehow hinting possible action in October. Equities retreating from intraday highs helped to keep pressure on the greenback. Following the hawkish rate cut from the Federal Reserve, markets are still pricing 25bp of easing by year-end, another factor putting the American Dollar under pressure. Today, if US equities keep retreating, the anti-risk Yen will advance further, possibly retesting the 107.50 level.
The Dollar bulls lacked the required momentum to challenge their way back above the broken trend line, and the 50-day moving average looks like cannot act as a support any longer. Price is starting to rollover and it looks like it’s heading towards the next support level 107.50. The bulls need to protect the 107.85 level to keep some kind of a hope for further upside gains.
Support: 107.85 / 107.50
Resistance: 108.30 / 108.50