The US Dollar was stronger against the Yen yesterday supported by higher yields and higher US equities. In addition, Trump announced that restrictions on Huawei operations would be delayed 90 days, giving US telecom companies more time to untangle their systems from reliance on the company’s technology. Moreover, Boston Fed president Rosengren who was against the rate cut in July, advocating for the Fed to pause at this stage, bullish on the US economy and showing little concern for overseas doom and gloom. However, the market is still expecting a rate cut as soon as September. The dollar will likely continue to be favored over the Yen in today’s session as risk-on sentiment prevails.
The Dollar bulls are slowly grinding higher as they have the 106.80 resistance level in sight. A break above that level will likely squeeze many weak shorts, pushing price towards 107.20. The Yen bears, on the other hand, need to break below 106, and the 50-day moving average to regain control.
Support: 106.20 / 105.80
Resistance: 106.80 / 107.20