Declines last week were due to GBP weakness but today it is all about the JPY
The pair touched a low of 141.06 in trading today, holding near the figure level support at 141.00 and has bounced higher thereafter. But there is also some daily support from the 11 August low @ 141.25 and that will be one to watch ahead of the daily close today.
Move below that and the last line of defense before the 140.00 level is cleared, and that paves the way for a potential test of the August low @ 139.31.
The risk-off mood is continuing to help keep a bid in the yen as EM currencies falter across the board - led by the lira. And broader markets are seeing flows away from equities still and into bonds; adding more reason why the yen is favoured today.
When such a trend is playing out, I always suggest not to fight it. Look for more near-term retracements and change in sentiment before going against the broader trend.
For the pair, there is risk events at the bottom of the hour as UK data is due (GDP and factory output). So, let's see if that changes the picture thereafter.