The December Yen remains on the defensive after yesterday’s negative turnaround, and in spite of the Fed’s tapering inaction this week it may be looking at a new weekly low later in today’s session. The post-Fed rebound in emerging market currencies and a revival of carry-trade positions has eroded support for the Yen, and helped to fuel a moderate shift in residual safe-haven flows across the Pacific into Dollars. With the likelihood that Japanese corporate tax breaks will offset that nation’s upcoming sales tax hike, the Yen may be heading for another downside leg in the near future. The December Yen may see a retest of yesterday’s 100.41 low, and will likely need a fresh dose of global risk anxiety in order to lift clear of these recent lows.
Technical Outlook
JPY (SEP): The major trend has turned down with the cross over back below the 60-day moving average. Momentum studies are rising from mid-range, which could accelerate a move higher if resistance levels are penetrated. The close below the 18-day moving average is an indication the intermediateterm trend has turned down. The market’s close below the 1st swing support number suggests a moderately negative setup for today. The next upside objective is 102.60. The next area of resistance is around 101.42 and 102.60, while 1st support hits today at 99.74 and below there at 99.23.