Risk aversion supports the Yen

The main stock market indices around the world are in the red. Risk aversion has come back into the markets with a vengeance after the disappointing earnings reports of some of the corporations in the United States and Europe. Additionally, the Chinese economy seems to be deaccelerating and that has pressured the emerging markets and the main Asian indices to the downside. As the risk aversion rises, the traders and investors find refuge in the Yen and other safe-haven assets like gold. That is why we see a strong drop on the USD/JPY during today´s session, due to the fact that the Yen is que quote currency on the pair.  However, despite today’s drop, the USD/JPY is still boxed between the 113.00 level and the 112.00 level. The 55 day exponential moving average is still above the 200 day exponential moving average, which is an indication that the pair keeps a slight bullish trend. Besides the aforementioned, the USD/JPY has already visited in different occasions the 113.00 level and the more times the pair visits that level, the higher the probabilities of breaking it to the upside. To the downside, the most relevant support level is at the 200 day EMA, around the 111.23 level.