The Yen fell yesterday despite the falling global equities and US Treasury yields collapsing, spreading concerns that the US economy could be at the verge of recession. But the Dollar/Yen traders looked unfazed despite the deteriorating market conditions. This divergence means one of the two things: either the equity market is wrong and we will likely see a big correction to the upside or the Yen traders are not aware of the real danger the market is in. Today we will likely see this divergence to converge after the US releases the GDP numbers which will likely put an end to this uncertainty in the marketplace.
The Dollar/Yen was able to break above 109.55 yesterday after multiple intraday retests. Currently price is retesting the 50-day moving average, a break above it could push the pair towards a major resistance 110. The bears are expected to protect that level at all cost to stay in control, or else the bulls will once again take over and push price higher.
Support: 109.55 / 109.15
Resistance: 109.75 / 110