The Dollar/Yen fell to 111 during yesterday’s session, dragged lower by the equity markets slump, which put an end on the winning streak of US indexes. President Trump’s announcement that the US might put tariffs on $11B of EU products and the EU’s response that it would act tit-for-tat against those tariffs, weighed on market sentiment as trade fears reemerged. Later in the day, IMF slashed the global economic forecast from 3.5% to 3.3%, which dented the sentiment even more. Earlier this morning, Japan released some positive data for a change, but none of them important enough to impact the price. The Dollar bulls will try to recover yesterday’s losses, but the bearish market sentiment could put more pressure on the downside thus taking price even lower.
The USD/JPY broke below important support levels along with the 50 and 200-day moving averages, until it found support around 111. Currently price is trading in a very tight space between 111.10 (S1) and the 200-day moving average (yellow line), which is acting as resistance. If the bulls couldn’t find enough momentum to break above the moving averages and 111.25 (R1), then the bearish sentiment will take over and weaken the price further to the downside.
Support: 111.10 / 111 / 110.85
Resistance: 111.25 / 111.40 / 111. 55