Equities continue to be taken lower
The DAX is now at session lows down 1.1% while S&P 500 futures are down by 0.5%. As mentioned earlier, it's pressure points on multiple fronts that are taking stocks lower. All of this was of course foreshadowed when Tencent earnings disappointed earlier here. This is why it is important to pay attention to other asset classes even if you're trading currencies mostly.
As for USD/JPY, the pair is now testing the 111.00 handle and looks to break below the 200-hour MA (blue line) @ 111.04. Move below and hold and it would mean the near-term bullish bias fades away.
The next near-term support is the 38.2 retracement level @ 110.93 followed by the 100-hour MA (red line) @ 110.86. The latter is the key one to look out for as a break below that would mean that near-term bias turns bearish instead.
For now, look towards stocks and Treasury yields for further indication of the momentum that is pushing the yen higher. It's setting up to be an exciting start to US trading.
