The Dollar/Yen gaped down earlier in the Asian session as Trump’s 15% tariff on Chinese goods kicked in on September 1st. Trade tensions between the US and China continues to loom as China is taking diplomatic steps to avoid a further trade war but the Trump administration isn’t in a mood to have a good talk with Beijing when they probably meet for a trade negotiation some time during this month. Geopolitical tension is also gaining the grip as Russia recently warned the US of breaking ceasefire while attacking Syria’s Idlib, whereas the UK is considering sending drones to the Gulf amid tensions with Iran. Further, the US blamed Iran as a strong influence after Israel and Hezbollah exchanged fire at Lebanon border. Moving forward, traders will keep an eye on any negative trade/political headline for fresh demand on the anti-risk Yen.
The Dollar bulls retested the top of the consolidation zone, 106.70 during Friday’s session, after the bears took back control pushed price lower towards 106. The sellers will be attempting to extend their gains back towards the bottom of the channel, 105, however first they should break below the 105.70 support. Price will remain with no apparent bias as long as the pair is trading between 106.70 and 105. A breakout from these levels will likely establish a new trend in the market.
Support: 105.70 / 105
Resistance: 106.25 / 106.70