The Dollar bulls closed the gap and retook control as traders favored the greenback over the Japanese Yen amid fears that surging oil prices could increase inflation, which will likely lead the Fed not to cut rates during this week’s FOMC meeting. In addition, the optimism surround the US-China trade deal keeps the risk-on sentiment alive and well in the marketplace. However, US equities are lagging behind yesterday’s Dollar surge against the Yen, which could put a cap for now on any more significant advance on this pair, unless equities find enough momentum for a follow through, then we could see the Dollar advance further against the Yen.
After the recent gap down on this pair, price bounced back after touching the bullish trend line dating back to August 26. The bulls remain in full control as they attempt to break to new 2-month highs and retest 108.50. The bears on the other hand, remain underwater, as they need to break below the recent uptrend and the 50-day moving average to distort the bullish market structure.
Support: 108 / 107.50
Resistance: 108.30 / 108.50