The Japanese yen rallied against the dollar as growing concern about the trade dispute between China and the United States pushed investors into safe-haven assets nL5N22K25J.
The flight to safety is weighing on USD/JPY, where a large long position has swelled since February.
For the week ending April 30, the USD/JPY net long was an equivalent cash position of $11.17 billion, the biggest since the week ending Dec.
But EBS flow data since April 30 show that some of those longs may have been exited.
On Tuesday USD/JPY closed below the 110.44 Fibonacci level, a 23.6 percent retrace of the 104.10 to 112.40 2019 rise and the daily cloud base at 110.31, weakening the underlying market structure.
USD/JPY will likely drop through the March 109.70 low, which in turn will unmask the 109.23 Fibonacci level, a 38.2 percent of the same 104.10 to 112.40 gain.
EUR/JPY is also teetering on the edge -- bears eye the 122.67 Fibonacci level, a 50 percent retrace of the 117.85 to 127.50 2019 rise.