The December Yen was able to post moderate gains during the overnight session, although prices are still well below their weekly highs during Monday’s “post-Summers news” trading session. The Yen is finding a modest flight-to-safety bid in front of today’s FOMC meeting, but may not remain the safe-haven destination of choice if the Fed in fact decides to start tapering. With Japanese inflation well below their 2% target, the Yen is likely to be facing fairly aggressive BOJ easing measures well into the future. The December Yen may retest the 101.28 level this morning, but is unlikely to maintain upside momentum once the FOMC has their say in regards to the start of tapering later today.
Technical Outlook
JPY (SEP): Positive momentum studies in the neutral zone will tend to reinforce higher price action. A positive signal for trend short-term was given on a close over the 9-bar moving average. The market’s close below the pivot swing number is a mildly negative setup. The near-term upside target is at 101.27. The next area of resistance is around 101.10 and 101.27, while 1st support hits today at 100.72 and below there at 100.50.