While finding modest support and staying well clear of Tuesday’s spike low, the Yen has held onto thisweek’s downside breakout of the May-November “triangle” chart formation and may be heading for a retest of thekey 100.00 level just ahead. Global risk appetites may be subdued, but the Yen is finding little benefit as its statusas “safe-haven destination of choice” may be in question after the Dollar’s recent recovery. Unless there arestronger signs of improvement from the Japanese economy, particularly from their inflation front, the Bank ofJapan will continue with their aggressive easing measures and the US/Japanese yield gap will continue to widen.The December Yen may find support around the 100.25 level and may be in the early stages of an extendeddownside move.
Technical Outlook
JPY (DEC): Daily stochastics declining into oversold territory suggest the selling may bedrying up soon. A negative signal for trend short-term was given on a close under the 9-bar moving average. Theclose below the 2nd swing support number puts the market on the defensive. The next downside objective is99.77. The next area of resistance is around 100.73 and 101.18, while 1st support hits today at 100.03 and belowthere at 99.77.