The Japanese Yen was dumped yesterday after US-China trade headlines triggered a fresh wave of global risk-on trade. This led to a strong upsurge in the US Treasury bond yields, which helped revive the US Dollar demand and pushed the pair to the highest level since late-May. However, conflicting reports, suggesting that the subject of rolling back tariffs faced fierce internal opposition in the White House, which kept a lid on any strong follow-through. Adding to this, White House adviser Peter Navarro said that there is no agreement at this time to remove any of the existing tariffs. This led the pair to pullback; however, it remained limited, at least for the time being, as market participants are waiting for fresh trade developments before taking any major decision.
The Dollar-Yen pierced through 109.29 swing high, squeezing many shorts on its way, pushing the pair towards 109.50, highest level since May. 109.20 is acting as a strong support for now, if the bulls were able to hold it and gather enough momentum, we could see another upsurge on this pair, possibly taking price to retest the 109.80 resistance level.
Support: 109.20 / 109
Resistance: 109.50/ 109.80