As we approach mid-day in London, some clear trends are emerging, and they point towards risk-off and flight to safety. The USDJPY and AUDUSD are lower, and so is the DAX 30, and US stock market futures. Emerging market currencies as the South African Rand and Turkish lira are all weaker vs. the Dollar.
There is no specific news driving the markets, but the S&P 500 and Dow Jones futures have reached levels where we can expect profit taking to take place following last week’s bounce.
USDJPY had declined by 54 pips at the time of writing and is now clearly below the August 7 low of 105.48 with traders most likely targeting the next major low and likewise the 2018 low at 104.56. The trend in the pair will remain bearish below the August 2 high of 107.29 and traders are anticipated to sell on bounces that do not extend above the 107.29 level.
The DAX 30 failed to follow in the footsteps of US stock market indices and is now trying to reach the August 7 low of 11599. The next support level beyond the August 7 low is the August low of 11452. Resistance can be found at 11860.