The Dollar/Yen closed lower last week on concerns that the trade dispute between the US and China has worsened enough to weaken the U.S. economy. The concern surfaced after the release of weaker-than-expected U.S. manufacturing and services PMI data, which could potentially cut GDP growth for the months to come. Long-term government debt yields fell to near multiyear lows last week and treasury traders are pricing in a rate cut by the end of the year. This current bearish sentiment could last and the sellers will likely remain in control as long as trade disputes aren’t being resolved.
The Dollar/Yen broke below 109.50 on Friday as the bears regained control. Currently the bulls are attempting to break back above 109.50, if they are successful then the buyers could push the price higher towards 109.75. As long as price remains below the 50-day moving average, the momentum will most likely remain bearish.
Support: 109.50 / 109
Resistance: 109.75 / 110.00