The Japanese yen reached a two-week high versus the dollar on Wednesday as the threat of escalation in the trade conflict between the United States and China drove investors to safe-haven assets nL4N2351S1.
In recent weeks, there has been a steady flow out of USD/JPY; as demand for yen persists, that USD/JPY selling continues to weigh on the market.
For the week ending May 21, the USD/JPY net long was an equivalent cash position of $6.24 billion, down from $7.02 billion the previous week.
EBS flow data since May 21 show that even more of those longs may have been exited.
The tenkan and kijun lines are negatively aligned, reinforcing the underlying bearish market structure.
For the downtrend to accelerate, however, bears need to register a daily close below the 109.23 Fibonacci level, 38.2% of the 104.10 to 112.40 (2019) EBS rise.
Repeated failures to reach a daily close below the 109.23 Fibo will signal a possible base.