The Dollar/Yen fell hard on Friday after equities collapsed, with the 3 major US indices posting their largest intraday decline since January. The catalyst that triggered this run to safety was the dismal European data and the US Treasury yields curve, which inverted for the first time since 2007, triggering alerts about a possible recession coming to the US. Earlier today, Japan released the January All Industry Activity Index which came worse than expected, giving a small boost to the Dollar.
The USD/JPY retested the 200-day moving average (yellow line) during Friday’s session before falling off more than 100 pips. The pair found support around 109.80 (S1) and it’s currently attempting to break above 110 for a possible 110.40 (R1) retest. But the sentiment remains bearish so we expect price to roll over towards 109.80 (S1) and possibly 109.50 (S2), if 110.40 (R1) is retested and failed to break above it.
Support: 109.8 / 109.5
Resistance:110.4 / 110.85