Flight to safety flow ahead of the US opening
With US futures pointing to a lower opening and European shares lower, the USDJPY is moving lower on flight to safety flows. Concerns about the US/China trade is also a catalyst (for stocks and flows into the JPY - lower USDJPY)..
The pair reached a low of 109.80. The pair is currently trading at 109.91 helped over the last few minutes by comments from Fed's Bostic that he does not see a cut this year. The market is pricing in a 50% shot of a September cut currently.
Technicaly, the pair's 100 and 200 hour MAs are converging at the 109.725 area (green and blue lines). The 38.2% of the move up last week comes in at 109.816. The 50% is at 109.66 which is also near an upward sloping trend line. Those are targets on the downside today on more weakness.
The move lower today took the price below the 110.028-110.045. That areas should now act as a ceiling IF the sellers are to keep control today. A move above, changes that view. The level was home to swing highs on May 10 and again on Friday in the Asian session. The price waffled above and below that level in choppy trading on Friday. Today the price stalled around the area, before moving below and away from the level.
