USD/JPY falls to a low of 112.22 on the day
Price now looks to threaten a break of the 200-hour MA (blue line) @ 112.31 after having broken below the 100-hour MA (red line) earlier. Hold a break below the former and near-term price bias turns more bearish for the pair.
E-minis are still trading 1.1% lower on the day but that is not stopping the yen from pulling further ahead against the dollar, with the latter failing to find bids across the major bloc even as risk sours.
But the key level for USD/JPY remains that of the upwards trendline as pointed out earlier:
The bullish momentum since March has relied heavily upon that and that level sits at around 112.05 today. Given the way US equity futures are performing, it's looking almost certain we'll come around to testing the upwards trendline in the session ahead at some point when the cash equity market opens later.
The question now will be whether or not it is possible to see US stocks rebound from this latest setback seen so far today. Otherwise, the capitulation in US equities will accompany a breakdown in the bullish technical level in USD/JPY as well.
If this should be the beginning of a real rout - even if it's a short one - in US equities, I would expect USD/JPY to easily make its way towards 110.00 as its first target.
