The Dollar/Yen closed slightly in the negative territory yesterday over escalation of tensions between the US and Iran. An attack on two oil tankers, off the coast of Iran near the Strait of Hormuz, was committed. President Trump and Secretary of State Pompeo blamed Iran for the attacks. However, Iran has responded and denied the attack by rejecting “US unfounded claim”. Traders preferred the Yen over the Dollar as a safe haven to avoid market uncertainty. Equities, on the other hand, surged higher dismissing any potential risk. Today, market participants will likely shift back their focus on the ongoing trade disputes and Fed’s possible rate cut.
The Dollar/Yen remains trading in the same range between 108.20 and 108.50, as the bulls and the bears are waiting for a break to either side. A break below 108.20 will likely push price lower towards the yearly low 107.77. On the other hand, if the buyers successfully break above 108.50, then price could revisit the multi-year previous support, which recently turned resistance, 108.75-80.
Support: 108.20 / 107.77
Resistance: 108.50 / 108.75-80