Yen rallies on dovish Fed and fresh safe-haven demand on US/China pessimism
The pair extends weakness and is down 0.5% since opening of Asia, as dovish Fed hit dollar and safe-haven yen was additionally boosted by comments from China, expressing doubts over possible trade deal with the US.
Wednesday’s red Doji candle with long upper shadow was formed after strong upside rejection and failure to sustain gains above 200DMA (109.03).
Near-term bias turns negative as fresh bears crack pivotal supports at 108.30/21 (20DMA / Fibo 38.2% of 106.48/109.28 upleg) break of which would confirm reversal and open way for further weakness.
Daily momentum is breaking into negative territory and stochastic is heading south, supporting negative near-term otlook.
Sideways-moving daily Kijun-sen (107.88) marks next support, followed by key levels at 107.55/43 (Fibo 61.8% of 106.48/109.28 / converging 100/55DMA’s and Fibo 38.2% of 104.44/109.28).
Broken daily Tenkan-sen (108.75) marks pivotal barrier.
Res: 108.50; 108.75; 108.87; 109.06
Sup: 108.05; 107.88; 107.55; 107.43