The Dollar/Yen breaks below 112.00 and falls towards 111.40 in early Friday trading but now returns back to 112.00. Last week, the pair showed strong correlation with US stock indices which means that these two assets are trading in parallel with each other. Therefore Dollar/Yen traders should keep monitoring US stock indices until the correlation breaks. In addition to the performance on US equities, Dollar/Yen traders need to watch for the US’s PCE Deflator figure release as it might play a part in the US Dollar’s movement and thus the movement of the Dollar/Yen pair.
The Dollar/Yen pair is trading within a tight range. Depending on today's US equity performance and the US PCE Deflator figure, the pair will either break above the 13-period moving average exposing the next key resistance level at 113.75 or break below the 111.77 support level exposing the 111.32 level.
Support: 111.76 111.32
Resistance: 112.16 113.12