Yen on track for further rise on risk aversion; price adjustment may precede
The Japanese yen continues to shine on Monday and ticked to new multi-month high against US dollar at 108.07 (the lowest since 14 Jan), supported by fresh safe-haven demand, after signals of trade war spreading to countries beyond China.
The USDJPY pair fell sharply on Friday, registering loss of 1.2% in a biggest daily fall since 20 Dec.
Also, Friday’s close below important Fico support at 108.49 (50% of 104.59/112.40) was negative signal, which added o pair’s strong bearish sentiment on risk-off mode.
Daily techs maintain strong negative momentum and MA’s are in full bearish setup, favoring further downside and test of next supports at 107.76/57 (10Jan trough / Fibo 61.8% of 104.59/112.40).
Price adjustment on oversold conditions is expected to precede fresh weakness and offer better selling opportunities, with upticks expected to be capped at 109 zone (former low of 13 May / falling 5SMA).
Descending 10SMA which capped last week’s action marks pivotal resistance at 109.43 and sustained break here would question bears.
Res: 108.49; 109.02; 109.43; 109.63
Sup: 108.07; 107.79; 107.57; 107.00