A bumpy overnight session has left the Yen back near unchanged levels coming into this morning’s trading,as calmer global risk concerns and stronger Japanese equities are keeping it from sustaining any rebound fromlast week’s lows. With little in the way of major Japanese data points until next week, the ebb and flow of safehavensupport will remain in the driver seat for determining the Yen’s near-term direction. Unless global marketsshift back into a “risk off” attitude, the Yen is more likely to see a downside breakout than any extensive recoveryfrom these recent price levels. A retest of the 101.64 overnight high may occur with weak US data this morning,but the December Yen may need to see a dovish ECB and sluggish US Payrolls later this week in order to makeany strong upside move.
Technical Outlook
JPY (DEC): The moving average crossover down (9 below 18) indicates a possibledeveloping short-term downtrend. Daily stochastics are trending lower but have declined into oversold territory.The market’s short-term trend is negative as the close remains below the 9-day moving average. It is a mildlybullish indicator that the market closed over the pivot swing number. The next downside objective is 101.03. Thenext area of resistance is around 101.73 and 102.07, while 1st support hits today at 101.21 and below there at101.03.