The USD/JPY pair retreated sharply from a fresh yearly high of 111.12, initially weighed by poor US data, with retail sales printing their weakest outcome in a decade, and later by Wall Street’s sell-off, following news that the US and China are 'far apart' in trade talks. Today, the Dollar/Yen’s price movement will remain correlated to the equity market’s sentiment, thus traders will focus on the US stock market for further guidance. Moreover, Japan will release December's Industrial Production and Capacity Utilization figures, which could impact the price in the short-term.
The Dollar/Yen tried to push above 111.10 (R1) yesterday but eventually the bulls gave up and price pulled back, possibly heading to 110 (S1) for a retest. The bulls are still in control in the long-term, but price still needs to confirm the directional bias by breaking either above 111.10 (R1) or below 110 (S1).
Support: 110 / 109.60
Resistance: 111.1 / 111.40