The Dollar/Yen continues to trade within the 112.00 – 112.50 range as US stock indices remain unchanged at monthly lows. During the whole week, the Dollar/Yen showed near perfect correlation with US stock indices and this trend is expected to continue, meaning that Dollar/Yen traders should always keep an eye on the performance of US stock indices to guide their trades. For today, the pair will also be driven by US GDP data which will have an impact on the strength of the US Dollar. A disappointing GDP reading will signal a fall in the momentum of US economic growth and lead to speculation that the Federal Reserve will adjust their hawkish monetary policy plan.
The Dollar/Yen continues to trade in the same range since the beginning of the week. Uncertainty about the direction of the market can be explained by the fact that the three major moving averages are tangled within each other. The US GDP data today might lead to a break outside this range given the importance of the figure. A better than expected GDP figure will lead to a break above 113.10 paving the way for a rise towards 113.75. A lower than expected GDP figure will lead to a break below 111.76 paving the way for a drop towards 111.32.
Support: 111.76 111.32
Resistance: 113.12 113.75