USDJPY seeks support

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The Japanese yen finds support as August’s CPI hits an eight-year high. The trajectory remains up from the daily chart’s perspective and the latest pullback could be an opportunity to accumulate. A rally back above 137.40 at the start of the liquidation in late July is an encouraging sign that buyers are still in the game. However, the price action may stay choppy after a bearish RSI divergence and a fall below 136.70 triggered some profit-taking. 135.70 is the closest support and a bounce above 137.50 may send the dollar to 139.40.
 

EURGBP consolidates

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The pound steadies over a higher chance of a 75bp rate rise by the BOE next month. The pair came under pressure in the supply area around 0.8510 and a follow-up break below 0.8430 put the bulls on the defensive. The euro is hovering above the daily support at 0.8390 which is a key level to keep last week’s rebound intact. 0.8460 is the first hurdle ahead and a close above 0.8510 may trigger an extended rally towards 0.8600. Failing that, the pair could be vulnerable to a sell-off to this month’s low at 0.8340.
 

SPX 500 attempts to bounce

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The S&P 500 bounces as the shorts take profit ahead of Powell’s speech. The recent sell-off has stopped short at 4110, which is a daily support at the base of a bullish breakout. The level also coincides with the 30-day moving average, making it a congestion area. A bullish RSI divergence attracted bargain hunters with an initial pop above 4160. The bulls will need to lift the support-turned-resistance at 4210 before the recovery could gain momentum. A bearish breakout could trigger a fall to the psychological level of 4000.

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