The Dollar/Yen was losing steam in the early hours of yesterday’s session with US Government bond yields falling to fresh multi-week lows. However, losses were short-lived as equities rebounded from the lows after news indicating that the US would delay applying tariffs on European cars for six months, alongside comments from US secretary Mnuchin, who said that the US is ‘close to an understanding’ on removing steel and aluminum tariffs on Canada and Mexico. Market sentiment is slowly turning back to a risk-on mode, as traders are now becoming more optimistic and hopeful for a possible resolution regarding the global trade disputes.
The USD/JPY trimmed its losses and closed the day relatively unchanged as the bulls are getting back in control. However, the buyers need to close above 109.70 (R1) to confirm their short-term dominance. On the other hand, the bears need to break below 109 to confirm further losses on this pair. Although, a short-term bounce looks more likely, as price action is printing higher-lows favoring the bulls' side in the short-term.
Support: 109 / 108.50
Resistance: 109.70 / 110