Traders dropped the anti-risk Yen yesterday after US President Donald Trump told reporters that a trade deal with China could come ‘sooner than you think’ while adding that the US and Japan had reached an initial trade deal. Risk-on sentiment is back in the market place as US Equities and Treasury yields climbed intraday. Additionally, Chicago Fed President Evans, who normally leans to the dovish side, he said that two cuts were enough this year for inflation to overshoot the 2% target. However, Richmond Federal Reserve President Bullard wants one more 25bps cut before the end of 2019. The Yen may fall further in today’s session if the sentiment remains the same and US GDP data exceeds expectations.
The Dollar-Yen broke out from the downward channel but the bulls faced resistance at 50-day moving average, 107.80. The bulls will need to gather momentum once again and push past the resistance level to keep price action in their favor. Or else, the bears will once again take over and push price below 107.35, to ultimately regain possession.
Support: 107.35 / 107
Resistance: 107.80 / 108.10