The Dollar soared against the Yen yesterday after a strong Retail Sales data which reduced the odds of a Fed rate hike. Earlier this morning, the anti-risk JPY may have found some support due to losses in the Asian equities. If this stock market weakness continues in the EU and US sessions, the Yen could get a much stronger boost. Also, traders are well aware of the unresolved trade issues between US and China, as President Trump said yesterday during his speech that they have “a long way to go” on trade deal. The drop on the greenback, however, could be short-lived if treasury yields started to rise as the Dollar gets stronger.
The Dollar/Yen broke above the 30 pips range yesterday as currently is trading between the 50 and 200-day moving averages. If the bulls successfully protect 108.10, then we could probably see a push towards 108.50 during today’s session. However, if market sentiment goes sour, the bears will likely send the pair below 108 once again.
Support: 108.10 / 107.80
Resistance: 108.50 / 109