USD/JPY drops as S&P 500 futures report losses, defends 100-day MA support

• Equity index futures dropped after ex-Trump lawyer testified Trump told him to committee a crime
• The 100-day moving average (MA) is camping the downside in the pair. 
• The JPY has picked up a bid in Asia, possibly due to signs of risk aversion the US equity index futures. 

At press time, the USD/JPY pair is trading at 110.15 – down 0.20 percent on the day – having tested the 100-day MA support of 110.03 earlier today. Meanwhile, the S&P 500 futures are down 0.45 percent. 

US President Donald Trump's former personal lawyer, Michael Cohen, pleaded guilty on Tuesday to eight charges related to tax fraud, excessive campaign contributions, making false statements to a financial institution and unlawful corporate contribution, according to CNBC. Further, he testified that Trump directed him to commit a crime by arranging payments ahead of the 2016 presidential election to silence two women who claimed to have had affairs with Trump.

The news of Cohen’s guilty plea is likely weighing over the S&P 500 futures and helping the JPY score gains. However, the Fed minutes, due later today, are likely to reinforce the central bank’s plans for September rate hike and that could put a bid under the USD. 

USD/JPY Technical Levels

Resistance: 110.29 (session high), 110.38 (5-day MA), 110.64 (10-day MA)

SUpport: 110.03 (50-day MA), 109.77 (previous day’s low), 109.55 (June 19 low)