USDJPY consolidates gains
The US dollar edged higher after July’s ADP employment data beat expectations. A rally above 141.20 has forced short-term sellers to cover, easing the bearish pressure. Now that the pair has recouped most of the losses from a sell-off in early July, the bulls will need to consolidate their holding before they could push above 144.00 and towards a four-week high at 145.00. 142.00 is the closest support and further down 140.70 near a former supply area is a key level to keep the recovery momentum intact.
USOIL pulls back
WTI crude tumbled as ratings agency Fitch downgraded the US top credit rating. A series of higher lows was a sign of a mounting buying pressure and each dip had been an opportunity for trend followers to jump in. However, the price came short of last April’s peak of 83.40 and a drop below 81.00 triggered profit-taking that put the brakes on the advance, turning it into a fresh supply area. 78.50 is the next support as the RSI sank into oversold territory and 76.80 on the 20-day SMA a second layer if the correction deepens.
UK 100 slips into correction
The FTSE 100 faltered as an unexpected cut to the US credit rating took a toll on global risk sentiment. A fall below the cluster of support levels around 7620 has triggered a liquidation of short-term long positions, sending the price to the round number of 7500 which sits at the confluence of the base of a previous breakout momentum and the 20-day SMA. The RSI’s oversold condition may attract some buying interests as the index grinds the key demand zone. 7660 is the first hurdle to lift before the rally could resume.
