The Dollar/Yen drops sharply as investors protect themselves by purchasing Japanese Yens. Investors demanded the safe haven Yen following fears of a potential recession in the US. The US treasury yield curve inverted last night when the 5 year yield crossed below the 3 year yield, which signaled a possible recession in the US economy. On top of that, investors also feared that the trade negotiations between the US and China will not end on a positive note. For today, the Dollar/Yen pair will continue to be driven by sentiment in the market and investors can use the performance of US equities to guide them through their trades.
The pair breaks below the 200-period moving average signaling a shift in the general bias of the pair. Bearish momentum is currently in place as prices trade below all the three major moving averages. The next leg lower towards 112.50 will be triggered after a break of the 112.84 support.
Support: 112.84/ 112.50
Resistance: 113.32 / 113.68