The Dollar/Yen’s rally paused after a sharp retracement lower due to a weakening greenback. The US Dollar fell during yesterday’s US trading session following Fed Powell’s dovish remarks during his speech in New York. Powell pointed out that interest rates in the US are currently “just below” the desired neutral rate, suggesting that the Fed might not need to continue pursuing its aggressive plan of hiking rates every three months. This came as a major surprise to investors since just earlier this month, Powell stated that current rates are “a long way” from neutral. For today, investors will continue digesting yesterday’s remarks from the Fed Chair and they will also keep an eye on the performance of global equities as sentiment surrounding equities continue play a key role in the direction of the Dollar/Yen pair.
The Dollar/Yen breaks below the 113.37 support following Fed Powell's speech. The drop in the Dollar/Yen also comes after the rejection of the 114.20 resistance level. For now, the technical target for the break below 113.37 is at 113.07 which also coincides with the 200-period moving average.
Support: 113.37/ 113.07
Resistance: 113.67 / 114.20