Respect for consolidation support just above the 97.50 level is becoming impressive. With the deadline foryear end settlements passing, the Yen might shift its focus toward the ebb and flow of the Japanese economy,instead of focusing on repatriation flows. Like a number of other currencies and a long list of physicalcommodities, the Yen needs to see a definitive improvement in macro economic conditions, particularly fromChina to see its economy gain momentum. In the mean time, the BOJ looks to retain an easing posture, as itattempts to work through a sales tax hike. We can’t argue against a rise to consolidation resistance of 98.58, butwe think that would be considered a sale.
Technical Outlook: The cross over and close above the 40-day moving average is an indicationthe longer-term trend has turned positive. A bullish signal was given with an upside crossover of the dailystochastics. Positive momentum studies in the neutral zone will tend to reinforce higher price action. The crossover and close above the 18-day moving average indicates the intermediate-term trend has turned up. Theoutside day up and close above the previous day’s high is a positive signal. Market positioning is positive with theclose over the 1st swing resistance. The near-term upside objective is at 98.66. The next area of resistance isaround 98.43 and 98.66, while 1st support hits today at 97.73 and below there at 97.27.