The Yen continues to get stronger after last week’s dovish Fed. Global stock markets are flashing red despite possible rate cuts, which technically should boost the equity market instead. This current weakness in equities and strength in anti-risk Yen, likely indicate that traders see a low probability of US and China reaching a trade deal in the near future. Chinese President Xi Jinping is expected to meet the US President Donald Trump in the G-20 summit which will take place this Saturday. The greenback will remain under pressure against the Yen as long as these uncertainties prevail.
The Dollar/Yen broke below another major support, 107, as the overall bearish trend continues. The sellers are targeting 106.60 next, as long as 107 keeps acting as a new resistance level. The bulls, however, need to break above 107 and 107.50 to halt this current bearish momentum and take back short-term control.
Support: 106.60 / 106
Resistance: 107 / 107.50