The pair posted lows of 109.88 in trading today
Psychologically, it's a big level to break through and a surge of dollar weakness earlier certainly doesn't inspire confidence from buyers in the pair.
It's a real test of nerves now for buyers just below 110.00 as the next key level of support is the 50.0 retracement level at 109.93 on the daily chart. The upward trendline stemming back all the way to November 2016 looks to be in threat now as we're trading right below it.
If 109.93 fails to hold, it's going to be a sharp drop to the downside with the 14 June 2017 low of 108.83 seemingly the next support level thereafter. And below there it's the pivotal area near the 108.00 figure, between 107.87 to 108.13 the next levels of support.
The yen continues to lead the charge on the day while the dollar remains ever so fragile. With the BOJ risk event out of the way, there's not much else left on the week apart from minor US data ahead of Friday's final GDP reading and core durable goods orders.
Trump's protectionism policy that's likely to induce trade wars also doesn't help, and that is enough to keep the yen bid over the dollar at the moment.
