The USDJPY gaped down today morning after Saudi Arabia suffered a drone attack on Saturday on the world’s largest crude processing facility in Abqaiq, representing more than 5% of global crude production. Escalating geopolitical tensions in the Middle East could put a bid under the safe haven assets and the anti-risk Yen. However, the focus will remain on the Fed, as the probability of a rate cut being high, the question that traders keep asking themselves, whether it is going to be a 25 bps of easing or 50. The market will likely trade in a range with no clear path, until the Fed meeting on September 19.
The recent bullish trend has been broken after today’s morning gap down, as the Dollar bulls are attempting to take back the 108 level ever since then. The bears will likely be in control in today’s session eyeing to retest the recent low 107.45, as long as price keeps trading below the key level 108. If, however, the bulls were able to take back control, then 108.30 will be their short-term target.
Support: 107.70 / 107.45
Resistance: 108 / 108.30