Dollar/yen had its dance with the lows, dipping closer to the critical support level of 108.10 and bouncing back. The drops came as North Korea fired a missile over Japan, stoking tensions. US President Donald Trump said, “all the options are on the table”.
However, as time passes by, markets cannot be scared for too long. Trump is on the road and has less time for angrier statements or tweets. Officially, the US is not seeking to cut energy supplies from North Korea via sanctions.
The easier tensions were joined by positive economic news in the US: a beat on consumer confidence. In general, the greenback is making a comeback after being pushed to lower ground.
Fewer safe-haven flows and good data send the pair higher. The high so far is 110.16, above the very round 110 level. Perhaps more importantly, the pair is trading above downtrend resistance, as demonstrated in this chart.
We still have big events coming up later this week. Here is why this NFP report could trigger more volatility.Get the 5 most predictable currency pairs