The Japanese yen was among the top gainers in Asia on Monday as geopolitical tensions raised again after North Korea made another nuclear test over the weekend, prompting investors into safer assets.
The USDJPY pair opened with gap lower of some 80 pips on Monday, with subsequent recovery attempt being capped under 110.00 barrier and fresh weakness after the latest news, saying that North Korea is preparing for another missile test, sent the price below 109.46 pivot (daily Tenkan-sen).
Daily studies are entering full bearish setup which would, along with negative fundamentals, pressure the pair further.
Extension below 109.18 (Fibo 61.8% of 108.26/110.68 upleg) will generate another bearish signal for renewed attack at 108.83 (weekly cloud base) which was dented in several probes lower but so far without close below.
Near-term outlook remains negative and may see further easing, with sustained break below weekly cloud base, to open way towards key supports at 108.26 (29 Aug spike low)/108.11 (17 Apr low).
Broken Kijun-sen offers resistance art 109.65, with extended upticks expected to stay capped under psychological 110.00 barrier, reinforced by falling 30SMA.
Res: 109.65, 110.00, 110.44, 110.66
Sup: 109.38, 109.18, 108.83, 108.60
