The Dollar/Yen surged on Monday following the equities higher as trade talk optimism prevails. Stronger factory data out of China and the U.S. helped dampening fears of a slowing global economy. Earlier today, Japan released Monetary Base YoY, missing market expectations denting Yen’s overall bullish sentiment. Today, traders will be focusing on the US data, mainly the Durable Goods Orders and Non-defense Capital Goods Orders for any directional clues.
The USD/JPY broke above 111.1 key resistance area and currently sitting just below 111.40-50 important resistance area. If traders will be able to break above this key level, then we could likely see further strength taking price towards 111.70 (R2) and even 112. If, however, price gets rejected from the 111.50 (R1), then a pullback towards 111.10 (S1) will be a very likely scenario.
Support: 111.1 / 110.85
Resistance: 111.5 / 111.7