A rebound in Japanese equities and a continued erosion of safe-haven support have kept the Yen on thedefensive this morning, as prices are following through on last Friday’s reversal from a 21/2-week high above thekey 103.00 level. Global markets appear to be taking Chinese tightening in stride now, and comments by BOJDeputy Governor Iwata reaffirming their commitment to aggressive easing will make it difficult for the Yen toshake off today’s early pressure. Upcoming Japanese economic data this week may help to put the brakes on thispullback, but the market may wait for further guidance from the Bank of Japan before the Yen can make anysustained recovery. The December Yen may find support around the 102.28 later today, and could find additionalpressure if today’s US economic data can avoid any negative surprises.
Technical Outlook
JPY (DEC): Momentum studies are trending higher from mid-range, which shouldsupport a move higher if resistance levels are penetrated. The market’s short-term trend is positive on the closeabove the 9-day moving average. The market could take on a defensive posture with the daily closing pricereversal down. It is a slightly negative indicator that the close was lower than the pivot swing number. The nextupside target is 103.36. The next area of resistance is around 102.98 and 103.36, while 1st support hits today at102.40 and below there at 102.21.