The anti-risk Yen was the worst performer against the dollar yesterday with the pair jumping from the 105.00 region to 106.97 after the US government announced a delay in tariffs on some of Chinese imports until mid-December. Traders abandoned safe-haven assets and rushed back into equities on the relief headlines. Market sentiment however, remains bearish, as no real progress has been made in trade talks between US and China. Yesterday’s bullish move will begin to fade if no substantial progress is announced in the upcoming sessions.
The Yen bears were squeezed out after yesterday’s huge bullish move which made price to jump above the 50-day moving average to retest 106.80. If the sellers want to remain in control, then they should be able to defend the 106.80 and 107.10 critical resistance levels. If broken, price could squeeze out further shorts extending gains towards the 200-day moving average. On the flip side, the bears need to push price back below the 50-day moving average to start taking back control.
Support: 106.25 / 105.80
Resistance: 106.80 / 107.10