The Dollar/Yen bounced yesterday but still closed in the negative territory as global equities fell and the 10-year Treasury yields dropped below 2%, after Federal Reserve officials changed their tone regarding rate cut expectations. This helped the greenback to bounce a bit against the Yen, but market sentiment remains bearish as long as equities keep falling. Today’s US Durable Goods data will be crucial as it could validate the Fed policymakers’ change of tone, decrease the probability of a rate cut and in turn push the Dollar higher against the Yen.
The Dollar/Yen bears attempted to break below 107 yesterday, but the bulls were waiting on the other side to push price higher towards 107.50. A break above this level could take price to retest the 107.85 major resistance, which coincides with the 50-day moving average. That’s where the bear will ideally come back into the market to push price lower and resume the overall bearish trend.
Support: 107 / 106.60
Resistance: 107.50 / 107.85