While unable to follow-through on yesterday’s strong upmove, the Yen continues to find more than enoughsafe-haven support to hold its ground near the recent highs. A rise in the Chinese “flash” PMI to a new 7-monthhigh may have helped Japanese equities find their footing, but potential Chinese tightening will still cast a longshadow over global markets and keep the Yen fairly well supported at these levels. The Yen still needs to seepositive Japanese economic data to make any large-scale upmove from these present price levels, as flight tosafety flows alone will not be enough to overcome continued aggressive easing measures from the Bank ofJapan. The December Yen may slide down towards the 102.62 level later this morning, and would need to seesome very good US data this morning in order to drop sharply away from this current price area.
Technical Outlook
JPY (DEC): A bullish signal was given with an upside crossover of the daily stochastics.Momentum studies are rising from mid-range, which could accelerate a move higher if resistance levels arepenetrated. The intermediate trend could be turning up with the close back above the 18-day moving average.The market has a bullish tilt coming into today’s trade with the close above the 2nd swing resistance. The nextupside target is 103.65. The next area of resistance is around 103.25 and 103.65, while 1st support hits today at102.17 and below there at 101.48.