Monday’s reversal from multi-year lows has produced some modest follow-through strength, but the Yen isshowing little inclination for making a strong rebound to finish out 2013 this morning. Given the enormous losses ithas suffered this year, and with talk that the short side of the Yen is “crowded”, any weakness in today’s US datawould provide a catalyst for a short-covering rally. The Yen’s longer-term downtrend has much further left to gobefore it runs out of steam, so a sizable bounce this morning will provide an opportunity to enter the short side ofthe market. The March Yen may climb up towards the 95.42 level later today, with end-of-year short-coveringlikely to prevent a further drive into new low ground.
Technical Outlook: The market was pushed to a new contract low. Momentum studies aredeclining, but have fallen to oversold levels. The market’s close below the 9-day moving average is an indicationthe short-term trend remains negative. The daily closing price reversal up is a positive indicator that could supporthigher prices. The market tilt is slightly negative with the close under the pivot. The next downside objective is94.73. The 9-day RSI under 30 indicates the market is approaching oversold levels. The next area of resistance isaround 95.37 and 95.54, while 1st support hits today at 94.97 and below there at 94.73.