The Dollar/Yen continues its drop following further weakness from both the US Dollar and US stock indices. Weakness in the greenback and US stocks was attributed to a disappointment in the NFP figures for November. The NFP report released last Friday showed that only 155k jobs were created, compared to analyst expectations of 200k. In addition to that, wage growth rose by 0.2% only, missing analyst expectations of 0.3%. For today, the pair will continue to be driven by sentiment surrounding the US dollar, and investors need to also track the performance of US stock indices which are still key drivers of the pair.
The pair falls towards the 112.40 support level. Given that prices are now trending below all the three major moving averages, it is fair to say that the pair is in a downward trend with a bearish bias. Most recently, the 50-period moving average crossed below the 200-period moving average reinforcing the bearish momentum. The next leg downwards will only take place if prices broke below the 112.22 support, paving the way for a drop towards 111.90.
Support: 112.22/ 111.90
Resistance: 112.50 / 112.84