The pair opened with gap-lower on Monday and fell to the lowest since 8 Jan on rising risk aversion as death toll on corona virus in China rises.
Safe-haven yen extends its strong advance (up 0.74% last week) in such environment, with outlook for further gains if situation continues to deteriorate.
Fresh weakness of USDJPY on Monday generated negative signal on penetration of thick daily cloud (spanned between 109.02 and 108.33) and pressures pivotal supports at 108.68/65 (the base of falling and thickening daily cloud / Fibo 61.8% of 107.65/110.29), break of which would add to negative signals and expose 200DMA (108.51) and Fibo 76.4% (108.27).
Fading daily bullish momentum, 10/20/30DMA’s in bearish setup and south-heading RSI, support negative scenario.
On the other side, oversold daily stochastic suggests that bears may consolidate before resuming, but bears will remain in play while today’s gap stays intact.
Daily cloud top (109.02) offers initial barrier, followed by 55DMA (109.14) but only break and close above 109.28 (broken Fibo 38.2% of 107.65/110.29) would sideline bears.
Res: 109.02, 109.14, 109.28, 109.51
Sup: 108.73, 108.65, 108.51, 108.27
