USD/JPY Outlook: Fresh easing warns that recovery phase might be over
|The pair fell back to 109.50 zone (approx. the mid-point of this week's range) on fresh safe-haven buying as markets fear an escalation of US/China trade tensions after China signaled a lack of interest in resuming trade talks with the US under current circumstances.
Recovery attempts from week's low at 109.02 (supported by formation of bear-trap pattern on daily chart) ran out of steam at 110.00 zone, where repeated upside rejections occurred.
The barrier is reinforced by falling daily Tenkan-sen and guards more significant 110.31 resistance (daily cloud base/Fibo 38.2% of 112.40/109.02).
Near-term risk is expected to shift lower while the price remains below 110, with fresh weakness threatening of renewed attempt below cracked 109.41 pivot (Fibo 38.2% of 104.57/112.40).
Weekly close below here is needed to generate bearish signal for extension of bear-leg from 112.40 (2019 high, posted on 24 Apr).
Bearish momentum is gaining pace, with bearish setup of daily Tenkan-sen/Kijun-sen, supporting scenario.
Only sustained break above 110.31 would neutralize downside risk and shift near-term focus higher.
Res: 109.87; 110.00; 110.31; 110.48
Sup: 109.55; 109.33; 109.02; 108.49
Interested in USDJPY technicals? Check out the key levels
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