Traders rushed to the anti-risk Yen yesterday following the sell-off in US equities as market participants ran for the exits on trade talk concerns after Trump’s UN speech, as well as poor US Consumer Confidence data and fresh impeachment news reporting that the US House leadership was planning against Trump. Risk appetite has diminished and markets are pricing in the next rate cut at the 31 October meeting. Looking ahead, Fedspeak will be a potential catalyst again with Evans, George (dovish) and Kaplan (hawkish) all scheduled to talk today.
The Dollar-Yen continues to trade in the downward channel as the bears look like are targeting the 200-day moving average, which is also a critical support level, 106.75. However, a strong breach above 107.35 will likely breaks this current bearish market structure and confirm a reversal to the upside, possibly retesting 107.80 and the 50-day moving average.
Support: 107 / 106.75
Resistance: 107.35 / 107.80