The U.S dollar was lower against the yen in last weeks trading session as concerns over the outlook for global economic growth bolstered investor demand for the traditional safe haven yen. The dollar fell to three week lows against the yen on Thursday after the minutes of the Federal Reserve’s September meeting showed that some officials were concerned over a slowdown in global growth and the impact of the stronger dollar on the U.S. inflation outlook.
The minutes prompted investors to trim back expectations for an earlier-than-expected hike in U.S. interest rates.
On Friday, Fed Vice Chairman Stanley Fischer said weaker-than-expected global growth could prompt it to slow the pace of eventual interest rate hikes.
Weekly bias remains on the downside with a double top reversal pattern established on the strong bullish trend in the 4 hours charts. The minor bearish trend is supported with a fresh down cross of the 21 and 55 EMA. Also SSRC, RSI and MACD are signalling more bearish momentum in the pair. More decline is expected to 106.798 support in the medium term picture and a break of this support would bring more supply to 106.000 psychological zones.
On the other hand, a break of 110.072 resistance (October 1 high) would resume the bullish trend in the daily charts and more demand to 112.000 psychological zones in the long term picture is expected.
In the week ahead, investors will be awaiting U.S. data on retail sales and industrial production for fresh indications on the strength of the economic recovery. Markets in both the U.S. and Japan are closed for holidays on Monday.