The dollar rallied against yen on Monday as geopolitical tensions eased, recovering last week’s heavy losses.
Larger bears showed strong indecision ant key 108.80 support (low of 14 June which was dented on Friday’s spike to 108.72 low) after long-legged Doji candle was left on Friday.
Fresh rally is forming reversal pattern on daily chart which requires sustained break above psychological 110.00 barrier (also Fibo 38.2% of 112.19/108.72 bear-phase) for confirmation.
Bullish scenario of lift above 110.00 pivot would open way for stronger recovery towards barriers at 110.45 and 110.85, with key resistance at 111.00 expected to come in focus.
Alternatively, fresh downside risk could be expected while 110.00 barrier caps.
US retail sales data on Tuesday (0.4% f/c for July vs -0.2% in June) are in focus and expected to generate fresh signals.
Res: 109.88, 110.00, 110.16, 110.45
Sup: 109.34, 109.03, 108.80, 108.72
