The Yen remains off balance because of fears of fresh slowing in China, residual strength in the Dollar andfears of uneven activity in the Japanese economy. While we think the Yen has at least another 200 points on thedownside, a pause within a 91.30 to 92.20 range might be seen as the world embraces broad based big pictureeconomic slowing fears. In other words, to continue pressing the Yen back toward pre-sub-prime crisis levelsprobably requires more global optimism than is present in the current market and therefore we can’t argue againstsome waffling around both sides of 92.00.
Technical Outlook: The sell-off took the market to a new contract low. A bullish signal was givenwith an upside crossover of the daily stochastics. Daily stochastics are showing positive momentum from oversoldlevels, which should reinforce a move higher if near term resistance is taken out. A negative signal for trend shorttermwas given on a close under the 9-bar moving average. The market tilt is slightly negative with the closeunder the pivot. The near-term upside objective is at 92.56. Selling may soon dry up since the RSI is under 20indicating the market is extremely oversold. The next area of resistance is around 92.22 and 92.56, while 1stsupport hits today at 91.48 and below there at 91.09.