The September Yen continues to find significant pressure late this week, and may be showing early signs of starting another downside leg during the near future. While Asian emerging market economies remain a concern, this week’s positive read on Chinese sentiment has helped to drain a sizable portion of the Yen’s residual safehaven support. Japanese equities were able to make a robust finish to the week, which will also create further headwinds for the Yen during today’s session. Unless there is a revival of global market risk anxiety, the Yen is unlikely to regain strong upside momentum heading into the weekend. The September Yen may retest the overnight low of 100.88 later on this morning, and is likely to remain squarely on the defensive through the balance of this week’s trading.
Technical Outlook
JPY (SEP): The close under the 60-day moving average indicates the longer-term trend could be turning down. The downside crossover (9 below 18) of the moving averages suggests a developing short-term downtrend. 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. There could be some early pressure today given the market’s negative setup with the close below the 2nd swing support. The next downside objective is now at 100.39. The next area of resistance is around 101.91 and 102.74, while 1st support hits today at 100.74 and below there at 100.39.