The US dollar fell against Japanese yen to the lowest levels in nearly six weeks on strong risk aversion sentiment, fuelled by escalating geopolitical tension in the Middle East.
The pair eventually took out 200SMA support (110.34) which held downside attempts on Fri/Mon and broke below daily cloud base (110.15) and psychological 110.00 support during Asian session. Fresh extension lower was seen at the beginning of European trading that hit target at 109.58 (Fibo 76.4% of 108.11/114.36 rally. Bears are looking to fill the gap from 24 Apr for extension towards key short-term support at 108.11 (17 Apr low).
Daily studies turned into full bearish setup and support scenario, however, strongly oversold slow stochastic warns of correction.
Broken daily cloud base and 200SMA now act as solid resistances which should ideally cap corrective rallies.
Res: 110.00, 110.36, 110.53, 110.76
Sup: 109.48, 108.87, 108.32, 108.11
