A lower low in the Yen overnight seems to be the result of improved economic sentiment flowing from Chinaand the US. News that the Japanese have raised their capital expenditures forecast because of stronger thanexpected Japanese corporate earnings results, is another reason for the exodus of flight to quality players in theYen. In short, flight to quality interest in the Yen is being reversed and that could set the stage for a near termdecline to consolidation support in the June contract down at 97.78.
Technical Outlook: The daily stochastics gave a bearish indicator with a crossover down.Momentum studies are trending lower from high levels which should accelerate a move lower on a break belowthe 1st swing support. The market’s close below the 9-day moving average is an indication the short-term trendremains negative. The market tilt is slightly negative with the close under the pivot. The next downside target isnow at 97.94. The next area of resistance is around 98.52 and 98.81, while 1st support hits today at 98.09 andbelow there at 97.94.