The Dollar was in the lead yesterday until the market sentiment took a turn to the worse following the release of dismal US manufacturing data, lowest since 2009, as traders ran away from high-yielding assets, boosting the Japanese currency and other safe haven assets. US recessionary fears are back in the market place forcing the Fed to cut rates by the end of this month. The Dollar will likely resume selling-off in today’s session, especially if the US ADP data prints below expectations.
The Dollar-Yen printed a potential Double Top pattern after price was rejected yesterday around 108.50, and broke below the recent uptrend, shifting the market sentiment to bearish. The pair is back trading over/under the 50-day moving average, if the bears gather momentum then their first target will be 107.45 and then possibly to retest the swing low 107. The bulls on the other hand, need to break and hold above 108 to regain possession.
Support: 107.45 / 107
Resistance: 107.85 / 108.25