The Yen gained during the early Friday session, as traders turned risk averse after failed US – China trade talks, and President Trump announcing of a new US round of tariffs on Chinese imports. However, the Yen gave back all of its gains and then some after Secretary Mnuchin comments saying that the trade talks were ‘constructive’. Equities exploded higher and ended the day positively with a risk-on sentiment. Today, however, the Dollar/Yen gapped down in the Asian open after Kudlow admitting, over the weekend, that a trade war affects negatively on both countries. This uncertainty in the market sentiment is confusing traders as we start the new week with no clear bias.
The Dollar/Yen fell towards 109.50 on Friday potentially printing a double bottom pattern. Traders will wait for a break above 110 to confirm this pattern. However, a failure to break to the upside, the bias will remain with the bears and a retest towards the lows could be on the cards. The sellers need to break below 109.50 to confirm their dominance and continue the current bearish trend A break above but managed to closed just above a key support level 109.70.
Support: 109.70 / 109.50
Resistance: 110.10 / 110.30