Considering the support it found during the Asian session, the lack of upside follow-though this morningmay indicate that the Yen is heading down towards much lower price levels during the near future. A strongerthan expected Tankan survey, a lukewarm Chinese “flash” PMI reading and the Nikkei reaching its lowest closesince mid-November, should have kept the Yen well supported, but prospects for fresh BOJ easing measures inthe new year continue to weigh heavily on prices. Weaker US data this morning may provide a boost, but periodsof near-term strength continue to provide opportunities to approach the short side of the market. The March Yenmay find near-term support around the 96.88 level later today, and is likely to resume its longer-term downtrendonce the FOMC meeting is out of the way later this week.
Technical Outlook: The market broke to a new contract low. Momentum studies are declining,but have fallen to oversold levels. The market’s close below the 9-day moving average is an indication the shorttermtrend remains negative. The upside closing price reversal on the daily chart is somewhat bullish. It is aslightly negative indicator that the close was under the swing pivot. The next downside objective is now at 95.95.The next area of resistance is around 97.39 and 97.68, while 1st support hits today at 96.53 and below there at95.95.