It appears that the Yen has finally been able to apply some near-term brakes to this current downdraft, evenas overseas flight-to-safety support continues to dissipate. The latest Bank of Japan meeting minutes left somemembers uncertain whether their 2% inflation target would be achieved, which dampened Japanese equities andin turn provided modest strength to the Yen. There appears to be plenty of downside left to go before this downmove runs out of steam, but a near-term short-covering rally may be in the cards if today’s US data disappointsthe market. The December Yen may climb up towards the 98.86 level later today, but any extended rebound fromthese levels would provide a fresh opportunity to enter the short side of the market.
Technical Outlook
JPY (DEC): Momentum studies are declining, but have fallen to oversold levels. Themarket’s short-term trend is negative as the close remains below the 9-day moving average. The close below the1st swing support could weigh on the market. The next downside objective is 97.72. The market is approachingoversold levels on an RSI reading under 30. The next area of resistance is around 98.82 and 99.23, while 1stsupport hits today at 98.07 and below there at 97.72.