USD/JPY breaks support
The yen bounces across the board over concerns of a potential BoJ intervention amid an oversold market. The pair cut through the round number of 142.00 which sat at the confluence of the 30-day SMA and a support-turned-resistance from a bullish breakout in late June, sending a downbeat signal. 140.80 is the next level to see if the bulls would step in before the pair extends losses to the psychological level of 140.00. The RSI’s double dip in the oversold zone may cause a limited pullback towards 143.40.
EUR/GBP grinds critical floor
The pound bounces as traders expect interest rates to rise to a peak of near 6.5%. As the pair grinds the June lows around 0.8520, a bullish RSI divergence suggests a loss of momentum in the downward direction, and a breach above 0.8570 would provide confirmation and prompt sellers to cover. Then the former support of 0.8600 could be the last obstacle standing in the way of a sustained rebound. On the downside, a fall below 0.8520 would undermine the bulls’ effort and trigger a new round of sell-off towards 0.8400.
US 30 tests daily support
The Dow Jones 30 recovered some lost ground as the market turned its attention to upcoming CPI data. The index is testing the previous swing low and daily support at 33600, a major level to keep June’s bullish momentum going as its invalidation would force bulls to abandon ship and cause a deeper correction. The top of a limited bounce at 34000 is the first hurdle to clear then the double top at 34470 is the current ceiling. In case of bearish breakout, 33100 at the base of the June breakout rally could be in the crosshairs.
