The September Yen is finding little upside momentum early this morning, as last night’s broad set of Japanese economic reading produced mixed results. While the key BOJ gauges of CPI and Unemployment showed some measure of improvement, lukewarm readings for Industrial Production and Housing Starts have fed into yesterday’s sluggish Retail Sales number to throw up some cautionary “red flags” for the Japanese economy – which was reflected in this week’s poor performance by Japanese equity markets. Asian emerging market currencies are grinding out a modest recovery this morning, which will further erode the Yen’s safe-haven support going into the weekend. Unless the Syrian situation shows signs of getting “hot” over the next few days, the Yen will have a difficult time rebounding back to what is looking to be formidable resistance areas around the 102.50 and 103.00 levels. The September Yen could see another retest of yesterday’s 101.50 low after the US data window, and for all of this month’s signs of strength the Yen is likely to finish August with a monthly loss.
Technical Outlook
JPY (SEP): The close under the 60-day moving average indicates the longer-term trend could be turning down. Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The close below the 9-day moving average is a negative short-term indicator for trend. The market setup is somewhat negative with the close under the 1st swing support. The next downside objective is 100.79. The next area of resistance is around 102.31 and 103.03, while 1st support hits today at 101.20 and below there at 100.79.