The Yen closed slightly negative yesterday ending the previous 4 consecutive positive days, as risk sentiment started to deteriorate once again. President Trump threatened to “end” Iran if it seeks fight with the US. However, Iran’s Foreign Minister Zarif has dismissed Trump’s “genocidal taunts” and warned him not to threaten his country. Moreover, US – China trade dispute continues after Google blocks Huawei apps from its phone, hinting possible further escalation ahead. In other news, Jerome Powell didn’t give much information for future monetary policy nor for trade tension but he emphasized the threats the market could face from the growing corporate debt. Given the recent changes in risk-sentiment, traders could favor the anti-risk Yen over the Dollar in today’s session.
The Dollar/Yen attempting to reverse the overall bearish trend but first it needs to break above 110.30, a major resistance level. Failure to break above that level, the bears will take over and push the price lower towards 110 and 109.70. Only a break below that area, which coincides with the 50-day moving average, could confirm the end of this short-term counter trend, and the bears will likely resume the sell-off.
Support: 110 / 109.70
Resistance: 110.30 / 111.00