With the US out of the picture today the FX market could be an interesting arena. USD/JPY’s downtrend could be reasserting itself, while cable will be hesitant ahead of the UK services PMI number.
GBP/USD could find support at 200-hour SMAToday’s services PMI is likely to provide plenty of volatility, so with the pair back nearing the top-end of its post-Brexit range (around $1.34) then the release might prompt some weakness. Nonetheless, the trend has been to buy cable since the August lows, so any sudden drop today might provide a buying opportunity.
Some support could be found around the 200-hour simple moving average ($1.3182), with the initial target for any bounce coming in at $1.3150.
EUR/USD could drop to August lowsSo far the pair has yet to see a new lower low, but given the way Friday’s spike was firmly sold another test of the low of last week around $1.1120 cannot be ruled out.
Nonetheless, a move through $1.12 would seem to put the buyers back in charge. A move below $1.1120 would suggest a drop down to the August lows of $1.1050, with the next level below here being $1.0950.
USD/JPY could target ¥105.30Although we did not see a new lower low during August in this downtrend, it looks like the ¥104 area is providing resistance. A rolling over here would suggest that the price could head back to the key ¥100 level, particularly if it heads back below the 50-day SMA (¥102.68).
Any rally needs to clear ¥104, with the next target for any bullish momentum being the 100-day SMA at ¥105.30 for USD/JPY.
