Yesterday’s key reversal from a new high for the move may lead to further downside for the Yen as safehavensupport continues to erode. Japanese equities had their strongest session in weeks with the Nikkei seeingits first two-day winning streak since mid-September, which has been a key source of pressure for the Yencoming into this morning’s trading. Last night’s BOJ meeting minutes provided some positive commentary on theJapanese economy, but gave no hints that their aggressive easing measures would be lifted anytime soon. The December Yen may find support just above the 102.50 level later this morning, and at this point would need freshsigns of Washington budget acrimony in order to climb back towards yesterday’s monthly high.
Technical Outlook
JPY (DEC): Momentum studies are trending higher but have entered overbought levels.The market’s close above the 9-day moving average suggests the short-term trend remains positive. The close over the pivot swing is a somewhat positive setup. The next upside target is 103.95. The market is becomingsomewhat overbought now that the RSI is over 70. The next area of resistance is around 103.63 and 103.95,while 1st support hits today at 102.93 and below there at 102.54.