The September Yen remains somewhat on the defensive this morning, and is showing few signs of regaining any large amount of recent lost ground in the wake of yesterday’s downside breakout. Japanese equities were able to put together back-to-back “up” days for the first time since August 2nd, which continues to drain flight-to-safety flows out of the Yen. With Chinese growth concerns dampened by their recent set of economic data, safe-haven support is likely to continue shifting back across the Pacific and into Dollars. With this week’s news of potential corporate tax cuts still reverberating in Japanese and Asian markets, the Yen may need a fresh surge of global risk anxiety in order to regain upside momentum. The September Yen may find support around the 101.58 level, and may be looking at further downside price action later today if the US PPI numbers can exceed market expectations.
Technical Outlook
JPY (SEP): The daily stochastics have crossed over down which is a bearish indication. Stochastics turning bearish at overbought levels will tend to support lower prices if support levels are broken. A negative signal for trend short-term was given on a close under the 9-bar moving average. The gap down on the day session chart is bearish with more selling pressure possible today. The market is in a bearish position with the close below the 2nd swing support number. The next downside objective is 100.74. The next area of resistance is around 102.53 and 103.49, while 1st support hits today at 101.15 and below there at 100.74.