After last week’s downside breakout failure of the May-November “triangle” chart formation, the Yen hasdropped sharply this morning and is closing in a retest of the key 100.00 level. Strong Japanese equities havecaused further erosion of the Yen’s safe-haven appeal, while the gap between US and Japanese longer-termyields continues to widen. Unless there is a fresh risk event that can revive flight to safety flows, the Yen looks toremain on the defensive through today’s session. The December Yen may find near-term support around the100.08 area, and is showing early signs that this week’s downside breakout could ultimately turn into an extendeddownside move.
Technical Outlook
JPY (DEC): Momentum studies are declining, but have fallen to oversold levels. Theclose below the 9-day moving average is a negative short-term indicator for trend. It is a slightly negative indicatorthat the close was under the swing pivot. The next downside objective is 100.47. The next area of resistance isaround 101.00 and 101.24, while 1st support hits today at 100.62 and below there at 100.47.