Dollar/Yen edges higher as US, European and Asian stock markets rally. After a harsh slump last week, equity markets were able to recover which drove investors sentiment higher and safe haven demand lower. Going forward, the pair will continue to be mainly driven by the performance of global equities and investor sentiment. Keep in mind that equities and investor sentiment are being driven by expected changes in interest rates, global economic data, trade tensions and political disparities. For today, investors need to monitor the Building Permits figure coming out of the U.S, which will give the market an idea about housing market condition in the U.S. Additionally, the FOMC Meeting Minutes will be released which is considered to be a key determinant of the Fed’s rate hike intentions.
The pair is currently testing the minor resistance at 112.25 which also coincides with the 50-period moving average. A break above this level will pave the way for a rise towards the next resistance level at 112.83. If investor sentiment breaks down once again then the pair will restart its downward momentum and break the monthly lows at 111.63 paving the way for a drop towards 111.37.
Support: 111.63 111.37
Resistance: 112.48 112.83