There has been little relief for the Yen early this week as the market drove further into new low groundbefore making a minor bounce this morning. The Japanese Nikkei remains on-course for its best annualperformance in over 4 decades, and continues to erode support for the Yen heading into year-end. Weak US datathis morning may trigger a short-covering bounce, but any rebound back towards the 95.56 level should beviewed as a selling opportunity. The March Yen will have a near-term downside target of 94.78, and looks to havemuch further left to go before finding any sort of “floor” price level.
Technical Outlook: The market broke to a new contract low. Momentum studies are still bearishbut are now at oversold levels and will tend to support reversal action if it occurs. A negative signal for trend shorttermwas given on a close under the 9-bar moving average. The outside day down is somewhat negative. Themarket is in a bearish position with the close below the 2nd swing support number. The next downside objective isnow at 94.75. The 9-day RSI under 30 indicates the market is approaching oversold levels. The next area ofresistance is around 95.36 and 95.72, while 1st support hits today at 94.88 and below there at 94.75.