The Dollar/Yen starts the week on a positive note as US equity futures push higher. The pair continues to show signs of correlation with US equities as the pair’s price remained unchanged on Friday similar to the S&P 500’s behavior. For today, correlation also remains positive as we see the Dollar/Yen track higher with S&P 500 futures. Given this, it is fair to say that the Dollar/Yen will be driven by the same fundamentals as US equities. Going forward, the key fundamental drivers of the pair are global political tensions, trade tensions between the US and China, the Federal Reserve’s monetary policy plan, and third quarter earnings from US public companies.
The pair successfully breaks above the 112.53 minor resistance paving the way for a rise towards 112.93. The break above this level also confirmed the break above the three major moving averages signaling positive bullish momentum, Bullish momentum will continue to strengthen as the 13-period moving average crosses above the 50-period moving average and the 200-period moving average.
Support: 111.63 111.37
Resistance: 112.53 112.93