The dollar surged to the highest levels in past seven days against yen, on news that US and China are to restart talks in attempt to avert growing risk of a trade war between world’s two biggest economies. In addition, data released today showed that the US personal income and spending came in line with expectations, while PCE index stays at 1.9% for a third consecutive month and consumer confidence rose to 127.4 in July, beating forecast and previous release. The greenback appreciated in positive environment, retracing over 50% of 113.17/110.58 pullback and eventually confirmed break out of four-day congestion, limited by rising 55SMA and 20SMA. Bullish tone that now dominates on lower timeframes also improved daily techs. Bulls need confirmation on daily close above already broken pivotal 110.50/60 zone (converged 10/20SMA/Fibo 38.2% of 113.17/110.58) for extension above 112.00 barrier, which would signal full retracement of 113.17/110.58 corrective leg. Fed’s policy decision on Wednesday will be next key event for the dollar.
Res: 112.00; 112.18; 112.56; 113.17
Sup: 111.88; 111.57; 111.19; 110.73
