The Yen continues to catch a bid as a quasi-safe haven instrument. Interest in safe haven instruments isbeing fueled by significant weakness in global equities and by downward revisions in growth by the IMF. In ouropinion the decline in the Yen over the last 4 months was primarily the result of ideas that the world was returningto economic normalcy and given the consolidation and recovery action in the Yen over the last 3 weeks, it is clearthat global recovery and a return to normalcy has been called into question again. With more equity marketdeclines we can’t argue against a near term climb back above 93.00. Longer term traders might consider thepurchase of December Yen 91.50 puts for 70 ticks directly ahead.
Technical Outlook: Momentum studies are rising from mid-range, which could accelerate amove higher if resistance levels are penetrated. The market now above the 18-day moving average suggests theintermediate-term trend has turned up. Market positioning is positive with the close over the 1st swing resistance.The near-term upside target is at 93.60. The next area of resistance is around 93.19 and 93.60, while 1st supporthits today at 91.99 and below there at 91.19.