The Dollar/Yen climbed towards 118.50 during yesterday’s session on Fed Powell’s comments of a possible rate cut. Equity market soared with the S&P 500 breaking back above key level 2800, but anti-risk Yen stayed in demand throughout this rush in risky assets, indicating a possible divergence in investors’ sentiment. The market has moved from concerns over global growth and pessimism due to trade wars to cheering the likelihood of a near term rate cut from the Federal Reserve. These volatile swings in the markets show us the fragility of the current equity market, which favors the Yen bulls to stay in control in today's session.
The Dollar/Yen retested 108.50 yesterday, previous support turned new resistance, to confirm the recent break in the bullish market structure. The sentiment remains with the bears, as they will attempt to retest the yearly low 107.77 and possibly break it this time around. The bulls however, need a break back above 108.50-60 to regain control and push price towards 109.
Support: 107.77 / 107.50
Resistance: 108.50 / 109