The Dollar/Yen closed slightly unchanged yesterday despite the fading recession fears and the risk-on sentiment in the US stocks, which printed new all-time-highs on Monday. Earlier today, in the Asian session, the anti-risk JPY gained more ground against the greenback as the Chinese data came worse than market expectations. The Yen’s strength could also be associated with either the recent BOJ policy, when they took a decision to take a step back from stimulating the economy, or simply because the Yen bulls are still not convinced of this current euphoric record highs in stocks.
For the second consecutive day, the Dollar/Yen closed just above the 111.50/60 critical level after it retested the 50-day moving average (blue line) but failed to break above it. Earlier today, the Dollar bulls finally gave up the 111.50 key level invalidating the inverted H&S pattern, and price is currently resting just above the 200-day moving average (yellow line). If the bears will be able to keep the price below the 111.50 level, then we could likely see more weakness on this pair, possibly towards 111.25(S1) and 111(S2).
Support: 111.25 / 111 / 110.85
Resistance: 111.50 / 111.80