The September Yen was showing considerable strength during the overnight session, but has given back a sizable amount of those gains coming into this morning’s trading. Plunging emerging market currencies and equity markets have provided a steady diet of safe-haven support to the Yen, with 2% declines in the Nikkei and the TOPIX adding to last night’s Asian flight-to-safety theme. The Yen failed to fill-in a chart gap up to 103.18 for the third time in four sessions, however, which may indicate some significant resistance up at that price level. Unless there is further risk aversion seen throughout Asian and global markets, the Yen will have a difficult time regaining upside momentum. The September Yen may slide down towards the 102.55 level later today, and could see further downside as risk attitudes start to improve around the globe.
Technical Outlook
JPY (SEP): Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The close below the 9-day moving average is a negative short-term indicator for trend. It is a slightly negative indicator that the close was under the swing pivot. The next downside objective is 101.59. The next area of resistance is around 102.86 and 103.20, while 1st support hits today at 102.06 and below there at 101.59.