Technical Analysis

USD/JPY touches a low of 112.46 on the session


Price is now threatening a break of the 200-hour MA (blue line) as buyers struggle to extend overnight gains in the pair. US equities started the day on the back foot but recovered and that led to a move higher in yesterday’s trading but trading today has been relatively subdued with Asian equities down in the doldrums and the sentiment seen in E-minis aren’t helping either:

S&P 500 futures are down about 0.4% currently and that is weighing on yen pairs as we begin the session. The latest Fed minutes overnight suggested that more rate hikes are to come and that the Fed is comfortable to move rates past the longer-run level and that signals that yields are set to rise much more in the coming year.

I would say US equities took that message quite well given the start of trading yesterday but Asian equities aren’t responding that favourably to the news today. Jitters still remain in the equities space no doubt, and the sort of tepid theme and lack of conviction to break to the upside will continue ahead of US trading as long as futures remain on the softer side ahead of the cash equity market open later.

For USD/JPY, further downside support is seen at 112.16 from the 100-hour MA and bids at the 112.00 level as well.

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