The Dollar/Yen pair points lower as investors continue to steer away from high beta currencies given the rising uncertainty in global markets. Investors are piling into the Japanese Yen as they perceive it as a currency that acts as a safe haven. Safe haven demand is on the rise given the uncertainty about the future of global equity markets after last week’s deep sell off. Additionally, safe haven demand is in place as investors worry that the Brexit negotiations will not conclude anytime soon or even conclude with a “no deal”. Today’s U.S Retail Sales figures are key to the pair’s performance as market participants search for more clues on whether the Federal Reserve will alter their hawkish monetary policy.
The pair breaks below the 111.83 support level as demand for the Japanese Yen grows. The break of the 111.83 support level comes after a rejection of the 200-period moving average signaling that sentiment is officially bearish on the Dollar/Yen pair. Additionally, the bearish momentum can be concluded due to prices constantly trading below the 13-period moving average. Note that the break below the 111.83 support level opens up the way for a drop towards the next key support level at 111.37.
Support: 111.83 111.37
Resistance: 112.53 112.83