The Yen remains on the defensive this morning, but was able to avoid reaching a new low before this morning’s US jobs data. The sharp selloff since late October has left the Yen oversold, but there are few signsfrom Japan that this current downdraft will be letting up anytime soon. Weak US numbers could lift the Yen backtoward the 87.83 area, which would provide any opportunity to re-enter the short side of the market, but anyfurther rally back towards the Tuesday high at 88.39 may be ambitious given the lukewarm to sluggish Japaneseeconomy.
Technical Outlook: The market made a new contract low on the break. Daily stochasticsdeclining into oversold territory suggest the selling may be drying up soon. The market’s close below the 9-daymoving average is an indication the short-term trend remains negative. The market’s close below the pivot swingnumber is a mildly negative setup. The next downside target is 85.88. Selling may soon dry up since the RSI isunder 20 indicating the market is extremely oversold. The next area of resistance is around 87.37 and 88.09,while 1st support hits today at 86.27 and below there at 85.88.