The Dollar/Yen remained positive but little changed during yesterday’s session due to overall risk-on sentiment but with lack of major catalysts. Investors remained optimistic with an upbeat start of the US earnings season and the positive developments surrounding the US-China trade deal. Keeping in mind that the pair could lose its recent bullish momentum if we don’t have any updates on the trade deal soon. Equities pulled back during the day, but ended on a higher note, keeping the pressure on the Yen. The overall sentiment is turning bullish on the Dollar/Yen but we remain cautious moving forward as any disappointment from the US earnings or the trade deal could dent the recent bullish narrative.
The Dollar/Yen closed just over 112 on Monday, but not convincing enough to consider it as a breakout. Price looks ready to pull back towards 111.60s to retest the recent broken Neckline. The bulls need to hold that level to keep this inverted H&S pattern intact and valid. We expect price to bounce once it reaches 111.60s to take it higher towards 112 and ideally break above it this time. Failure to hold the 111.50-60s level, would invalidate this bullish pattern.
Support: 111.50 / 111.25
Resistance: 112 / 112.30