Yen hits new multi-month high on fresh safe-haven demand

The pair dipped below 109 handle in early Friday’s trading, for the first time since late Jan.
Escalation of trade war on the latest decision of US administration to impose tariffs on all goods from Mexico, sparked fresh safe-haven demand and pushed yen to new multi-month highs, with strong technical signals of possible further advance of yen adding to improved sentiment.
Thursday’s strong upside rejection (spike high was left at 110.92 after the action was capped by falling 20SMA) and subsequent bearish acceleration, generated bearish signal on formation of bull-trap pattern on daily chart.
Also, final break below the floor of four-day congestion and extension below key support at 109.02 (13 May low) adds to negative signals for continuation of downtrend from 112.40, which require confirmation on weekly close below this level.
Fresh bearish momentum is building and adding to negative signals from daily MA’s in full bearish configuration, with thick weekly cloud also pressuring.
Bears eye immediate target at 108.50 (31 Jan low / Fibo 50% of 104.59/112.40 rally) with deeper fall expected on break here.
Broken former low at 109.02 now marks initial resistance, followed by broken Fibo 38.2% support at 109.41) with converged falling 10/20SMA’s (109.67/79) expected to cap extended upticks and maintain bearish bias.

Res: 109.02; 109.41; 109.67; 109.79
Sup: 108.78; 108.50; 108.00; 107.57