Given the positive reception for last night’s set of Japanese economic data, the Yen has found surprisinglylittle upside momentum, as prices have remained inside of Monday’s trading range this morning. DecliningUnemployment and a sharp jump in Retail Sales may bolster the case for easing back on Japanese stimulusmeasures, but inflation still has a long way to go before approaching the Bank of Japan’s 2% target level. Withlast night’s liquidity injection from the Chinese central bank helping to diminish safe-haven support, the Yen mayneed to see sluggish US data later today in order to build onto this morning’s modest early gains. The DecemberYen may retest the 102.63 overnight highs later today, but a continued drain of flight-to-safety support will make itdifficult for the market to extend these early gains.
Technical Outlook
JPY (DEC): Momentum studies are rising from mid-range, which could accelerate amove higher if resistance levels are penetrated. The close above the 9-day moving average is a positive shorttermindicator for trend. The market’s close below the 1st swing support number suggests a moderately negativesetup for today. The next upside objective is 102.77. The next area of resistance is around 102.54 and 102.77,while 1st support hits today at 102.18 and below there at 102.05.