With flight to quality sentiment tamped down relative to earlier this week, the upward track in the Yen hasbeen restrained. While the September Yen actually forged an upside breakout on the charts yesterday, we don’tsee the fundamental case to think that the Yen is poised for an upside extension. In fact, the dominating force inthe currency markets might be a lack of leadership by any currency. For the time being, we see significantresistance in the September Yen up at 98.99 and therefore the next move in the Yen might be to fall back towardthe middle of the last 8 month old consolidation zone.
Technical Outlook: The crossover up in the daily stochastics is a bullish signal. Momentumstudies are trending higher from mid-range, which should support a move higher if resistance levels arepenetrated. The market’s short-term trend is positive on the close above the 9-day moving average. Marketpositioning is positive with the close over the 1st swing resistance. The next upside objective is 99.28. The nextarea of resistance is around 99.01 and 99.28, while 1st support hits today at 98.45 and below there at 98.15.