The Dollar/Yen recovered most of its losses yesterday and closed slightly unchanged as equities soar to all-time highs and the S&P is shy away from the historic 3000 mark, on expectations of a Fed cut following data misses and no obvious US-China trade deal in sight. Markets pricing 33 basis points of easing at the July meeting, with a total of four cuts priced by mid-2020. In political news, Washington and Tehran pretty much declaring war as tensions escalate between the two sides on a daily basis. The global economic slowdown, the high probability of a Fed rate cut, and the current political uncertainty will keep traders favoring the Yen over the Dollar.
The Dollar/Yen bounced after finding support just above the 107.50 level. Currently, the bulls are attempting to break above 107.85, if successful, then a push towards 108 and 108.20 will be a likely scenario. However, if the bears protect the 107.85 resistance level, then price could roll over and retest yesterday’s low 107.53.
Support: 107.5 / 107.05
Resistance: 107.85 / 108.20