Wednesday, May 29, 2019

USD/JPY - 29 May 2019


Fundamental Highlights

The Dollar/Yen dropped overnight as US equities, specifically the S&P 500, fell below the 2800 major support level, after Trump said that the US wasn’t ready to make a trade deal with China. He later added, that tariffs on Chinese products could go up “very substantially”, adding more fear and uncertainty in the marketplace. On the other hand, US yields fell hard, with the 10-year yields falling to the lowest since September 2017. Moreover, the chance of a Fed rate cut by December, implied by Fed fund futures, increased from 130% to 140%. Traders will likely keep fleeing to the anti-risk Yen in today’s session as the risk of a global economic slowdown keeps increasing.

Technical Analysis

The Dollar/Yen couldn’t break above 109.55 yesterday, as the bears took over and started to push price lower towards 109. A break below this level, would open doors for a possible retest of a key multi-year support level 108.50. The bulls won’t give up that level easily so we expect a strong battle between them and the bears once price reaches there. The sellers will remain in control in today's session as long as price keeps trading below 109.55.

Support: 109 / 108.50
Resistance: 109.55 / 109.75

Chart (H4)