The Dollar/Yen rallied towards 112.40, a fresh yearly high after the US Dollar exploded to the upside against all major currencies. However, a much stronger Dollar and mixed earning reports kept US equities in negative territory, which in turn kept the gains on the USD/JPY capped. Today, traders will keep an eye on BoJ as it will have its monthly monetary policy meeting, with the expectations to maintain it unchanged. Nevertheless, policymakers have previously hinted that they won’t hesitate on adding stimulus if necessary, which normally could put downside pressure on the Yen.
The Dollar/Yen barely tested the long-term bearish trend line, 112.40, before it met with a strong selling power taking price back below 112. This kept price to stay in consolidation zone while traders are still waiting for a successful break to either side, to confirm the next possible trajectory. The sentiment remains bullish, although a bit dented after today’s price rejection.
Support: 111.50 / 111.25
Resistance: 112 / 112.30