USDJPY Outlook: Fresh Safe Haven Demand Boosts Yen And Undermines Recovery Action

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The pair was sharply down in Asia / early Europe on Tuesday, losing around 0.4% as yen benefited on renewed safe-haven demand. Fresh weakness sidelined hopes of recovery extension after Monday’s action eventually closed above pivotal 112.74 (Fibo 38.2% of 114.54/111.62) and generated bullish signal. Upside attempts stalled just under 20SMA (112.92), which is turning lower and adding to bearish pressure, along with strong bearish momentum and south-turning slow stochastic which reversed on approach to overbought zone border. Pullback from recovery high at 112.88 retraced so far 50% of 111.62/112.88 recovery leg, signaling that corrective phase might be over. Extension and close below 112.10 (Fibo 61.8% / base of thick 4-hr cloud) would confirm negative scenario and expose 55SMA / trendline support (111.91) with extension towards key support at 111.62 (15 Oct low) not ruled out, as daily cloud twists on Thursday and could be magnetic.

Res: 112.47, 112.74, 112.92, 113.08
Sup: 112.10, 111.91, 111.62, 111.47

 
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