The Dollar/Yen closed slightly unchanged yesterday as the bullish sentiment in the equity market weighed on the Yen. Citigroup performed and beat analyst’s expectations which enabled stocks to close at record highs again. Meanwhile, expectations of a rate cut from the Federal Reserve at the end of July is increasing, with the markets continuing to price in around 30bp of easing at the 31 July meeting is keeping the bulls in check. However, June PPI and CPI data showed that core inflation inched up, but the Fed will still likely ease in July as it remains more concerned about global economic factors than inflation.
The Dollar/Yen is currently stuck in a 30 pips range between 108.10 and 107.80, as traders have no clear bias in the short-term. The bulls will attempt to take out 108.10 to target 108.50 and the bears, on the other hand, will try to find momentum and push price below 107.80 to open doors for further weakness. As long as price keeps trading below 109, the sellers will remain in control in the big picture.
Support: 107.80 / 107.60
Resistance: 108.10 / 108.50