The Dollar/Yen closed with little gains yesterday but weak follow-through kept price in the same consolidation zone. US equities soared in the early session amid upbeat China data and on hopes of a global economic recovery, but later in the day the market wiped out the gains and closed negatively. However, the Yen didn’t budge throughout this volatility as traders are cautiously waiting for a confirmation before acting. Earlier today, the Dollar/Yen pulled back a bit after North Korea tested a tactical weapon under the leader Kim Jon Un’s guidance, renewed geopolitical fears as the US-North Korea tensions could be sparked once again. Throughout the rest of the day, traders will mainly focus on the state of global equities as the leading indicator for this pair.
The Dollar/Yen is still trading over and under 112 (major resistance level). If the bulls successfully break above this level, then the next major resistance area is 112.30-40. However, failure to hold above 111.80, then price will likely pull back to retest the 111.60 neckline. As long as price remains above 111.60, then the bias will remain with the bulls.
Support: 111.50 / 111.25
Resistance: 112 / 112.30