The yen outperformed in the currency market during the last five days on the back of risk aversion amid geopolitical concerns. The rally in US Treasuries also supported the yen. The 10-year ended around 2.23%, the lowest since mid-November. On the low liquidity session of Friday, US data showed a surprise decline in the CPI index in March and also lower-than-expected numbers in retail sales. The yen gained more ground after the reports as lower inflation and weak retail sales do not add to Fed rate hike expectations.
The latest economic numbers and actions taken by US President Trump continue to be supportive of the bearish trend in the USD/JPY pair, that posted the worst weekly results in months after losing more than 200 pips.
The acceleration took place after the pair broke the key technical support of 110.00/10. Short-term indicators could point to oversold conditions, but the Momentum is still very negative as price continues to search a new support. The weekly chart shows the RSI still not at extreme levels and price moving with a clear bearish trend. The next long term support is seen around 107.60/50. For the next days, any run below 110.10 could be seen as corrective; while if the US dollar consolidates above, it could gain support and look for a consolidation.
Support levels: 108.50 108.30 108.00
Resistance levels: 109.30 109.85 110.10