The Dollar/Yen fell yesterday as equities and US Treasury yields dropped, denting the investors’ risk appetite. Global economic slowdown coupled with trade war uncertainty and the recent yield curve inversion, play a major part in this current bearish narrative in the market. This ‘flight to safety’ sentiment will definitely increase even more if today’s US GDP numbers disappoint.
The USD/JPY broke back below 110.40 signaling a possible retest of the 109.80 (S1) level. The bias remains bearish as price action is weak and the 50/200-day moving averages are crossing over. A possible retest of 110.40 (R1) looks plausible before continuing its downward trajectory towards 109.80 (S1) or even further 109.5 (S2).
Support: 109.8 / 109.5
Resistance: 110.4 / 110.85