- The USD/JPY has dipped below the 200-hour moving average (200-HMA) support of 111.00 and could drop further if the equity markets in Europe and America report losses.
- As of writing, the S&P 500 futures are flatlined. Further, the 14-hour relative strength index (RSI) is reporting oversold conditions. As a result, the pair could trade in a sideways manner around 111.00 for the next few hours.
- The support at 110.59 (July 26 low) could be put to test if the ratings agency Fitch downgrades Italy, sending stock markets lower across Europe.
Hourly Chart
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Spot Rate: 110.95
Daily High: 111.07
Daily Low: 110.88
Trend: Consolidation likely
R1: 111.14 (50-day moving average)
R2: 111.49 (Aug. 24 high)
R3: 111.83 (Aug. 29 high)
Support
S1: 110.59 (July 26 low)
S2: 110.32 (100-day moving average)
S3: 110.00 (psychological level)
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