Safe-haven support continues to drain from the Yen this morning, as fairly positive readings from last night’sJapanese Machinery Orders and Consumer Confidence data did little to put the brakes on this current sell off.Japanese equities are on a 3-day winning streak, which will also be a key source of pressure for the Yen thismorning. It may be difficult for the Yen to make a large-scale downside move with so much uncertainty remainingon the Washington budget front, but there is little chance for a retest of Tuesday’s high for the move unless thereis a severe deterioration of sentiment both in Japan and from overseas. The December Yen may find support around the 102.05 level, and is likely to remain squarely on the defensive as long as global risk sentimentcontinues to mend during today’s session.
Technical Outlook
JPY (DEC): Rising stochastics at overbought levels warrant some caution for bulls. Themarket’s short-term trend is positive on the close above the 9-day moving average. It is a slightly negativeindicator that the close was lower than the pivot swing number. The next upside target is 103.73. The next area ofresistance is around 103.24 and 103.73, while 1st support hits today at 102.37 and below there at 101.97.