The Dollar/Yen dropped as global equities suffer due to growing political uncertainty in different parts of the world. Investors are fearful about the outcome of the Brexit negotiations and the political scene within the EU given the disagreement related to Italy’s proposed budget plan. More importantly, they also worry about the effects of the political and trade tensions between the US and other countries. As concerns surface financial markets, equity values will drop and drive the Dollar/Yen pair lower.
As political and trade concerns rise, the pair failed to continue its two day rally. Prices fell back below the three major moving average signaling a shift towards a bearish trend bias. The most recent break of the 200-period moving average (purple) paves the way for a drop towards 112.00
Support: 112.00 111.63
Resistance: 112.53 112.93