The US Dollar / Yen has rebounded alongside the 10yr yield today, which looks bullish on the surface as the pair came out of a descending channel which has kept the pair under tension since the beginning of the month.
However, one of the things that may have been overlooked in today’s rally is the long-term trend line that was broken in March of this year. It was a 6yr trend line from mid-2015, and we broke back below it this month. We are back testing this trend line again, which means between the 108.80-109.21 level could offer some strong resistance on rallies, especially a day ahead of the FOMC decision.
The economic calendar today already posted the Japanese yearly Retail Sales as better than expected (5.6% Actual from a 4.6% Expected). Investors are looking forward for the tonight’s FOMC Statement and Press Conference with no changes expected but with some expected volatility at the time.
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