While staying well above last Friday’s spike lows, the Yen is having a difficult time sustaining upsidemomentum early this week. A rebound in Japanese equities has dampened another recent source of safe-havensupport, leaving the Yen even more dependent on the FOMC meeting results as a catalyst for extending anyrecovery move. The Bank of Japan is likely to remain steady policy-wise later this week, but the prospect for fresheasing measures next year will continue to weigh on the Yen going forward. The March Yen could bounce uptowards the 97.44 level with weak US data later this morning, but at this point the Yen remains firmly within alonger-term downtrend and heading for much lower prices levels.
Technical Outlook: Daily stochastics are trending lower but have declined into oversold territory.The market’s short-term trend is negative as the close remains below the 9-day moving average. The close overthe pivot swing is a somewhat positive setup. The next downside target is 96.55. The next area of resistance isaround 97.34 and 97.64, while 1st support hits today at 96.80 and below there at 96.55.