A series of lower highs suggests a lack of upside momentum. News of the 1st rise in big city real estatevalues in over 2 decades in Japan, might suggest the long held deflationary cycle is starting to lift, but the Yentrade should find it difficult to overcome the dominating influence of the carry trade. The bulls are emboldened bythe fact that the recent run up in the Yen was accompanied by a jump in trading volume, but until the FOMCdecision on Wednesday, we suspect that the Yen could be held within a range defined at 98.90 to 98.14.
Technical Outlook: Momentum studies are rising from mid-range, which could accelerate amove higher if resistance levels are penetrated. The market’s close above the 9-day moving average suggeststhe short-term trend remains positive. The swing indicator gave a moderately negative reading with the closebelow the 1st support number. The near-term upside objective is at 98.99. The next area of resistance is around98.64 and 98.99, while 1st support hits today at 98.08 and below there at 97.86.