Japan overnight seemed to release a wave of positive economic data that could have garnered significantheadline coverage if world equity market gains and the kick off to the US holiday shopping season hadn’t stolenthe focus. In fact, seeing Japanese auto production and auto exports jump sharply and seeing Japanesehousehold spending rise, would seem to paint a 180 degree shift in macro economic sentiment in Japan. Whilethe trend in the Yen is pointing downward, the December Yen might find support from the approach of the May2013 lows and it might also find support from the flow of Japanese economic readings overnight. Our pick for akey near term low in the Yen is 97.32 basis the December Yen contract.
Technical Outlook
JPY (DEC): The daily stochastics gave a bearish indicator with a crossover down.Momentum studies are declining, but have fallen to oversold levels. A negative signal for trend short-term wasgiven on a close under the 9-bar moving average. The defensive setup, with the close under the 2nd swingsupport, could cause some early weakness. The next downside objective is now at 97.15. The market isapproaching oversold levels on an RSI reading under 30. The next area of resistance is around 98.39 and 99.10,while 1st support hits today at 97.41 and below there at 97.15.