The Dollar extended its weekly advance to 108.93 during the first half of the day; however, it ended up falling during the US session, amid fading optimism about the newest Brexit deal passing the Parliament and mixed US data. Adding to the pair’s sour tone, US Equities trimmed most of its early gains ahead of the close, although US Treasury yields moved in the opposite direction. Earlier this morning, China’s economic release showed that the economy grew 6% from a year ago in the third quarter – the lowest in at least 27 years. Therefore, equities will likely remain under pressure, exposing the Dollar-Yen for further downside.
The Dollar-Yen bears were able to break below the medium-term rising trend line, putting pressure on the pair for further potential downside. 108.80 is acting as a very strong resistance for now, the bulls need to protect the 108.45 support, gather momentum and attempt to break above 108.80 for the third consecutive day. The bears on the other hand, already did the hard part by breaking below the trend line, now they need to pierce through 108.45 in an attempt to retest 108.10, which is also the 50-day moving average.
Support: 108.45 / 108.10
Resistance: 108.80 / 109.10