The continued erosion of safe-haven support has weighed heavily upon the Yen this week, as prices arenow back to within striking distance of multi-year lows. Japanese equities may have finished the day back nearunchanged levels, but news that the Nikkei reached a 6-year high last night along with the Chinese central bankcash injections have left the Yen with little in the way of longer-term support. Weak US data this morning mayprovide some near-term relief as well as trigger an early start to end-of-year short-covering and profit-taking, butany sizable recovery rally from these levels should still be viewed as a fresh opportunity to enter the short side ofthe market. The March Yen may find support around the 95.75 level this morning, and looks to have much furtherdownside left to go before its downtrend runs out of steam.
Technical Outlook: Momentum studies are declining, but have fallen to oversold levels. Themarket’s close below the 9-day moving average is an indication the short-term trend remains negative. With theclose higher than the pivot swing number, the market is in a slightly bullish posture. The next downside objectiveis now at 95.86. The next area of resistance is around 96.29 and 96.51, while 1st support hits today at 95.97 andbelow there at 95.86.