The Dollar/Yen closed strongly yesterday supported by Trump’s announcement that tariffs on Mexico were “indefinitely suspended”. The news also lifted US equities and the 10-year treasury yield climbed to its highest level in nearly a week, cooling off the demand on the anti-risk Yen. Regarding the US-China disputes, Trump said that the US is in a much better place than China and threatened to hit them with new tariffs if they won’t reach a deal at G20 on 28-29 June. Market participants are shrugging off all the negative news and only focusing on the positive ones, thus for now we could see higher prices on this pair squeezing out all the weak shorts that entered late last week, before continuing its downward trajectory.
The Dollar bulls are attempting to break above the key resistance area 108.60-70s for the second consecutive day, eyeing potentially to retest 109. However, the bears look resilient so far and are not giving up easily, and in their turn they are looking to close the Monday morning gap, 108.16. The sellers need to break below yesterday’s low 108.31, to open the doors for more weakness.
Support: 108.50 / 107.770
Resistance: 108.65-70 / 109