The Yen has been able to find its footing during overnight trading, but remains within striking distance ofreaching new low ground later this week. Comments by a Japanese government official have dampenedspeculation of a “snap” election, but the prospects that a sales tax hike will be delayed continue to hang over themarket and have kept today’s rebound well inside of Tuesday’s trading range. With the BOJ’s comments that theirpolicy is directed at recovery and not forex rates also hanging over the market as well, the Yen needs to see asignificant improvement in Japanese data in order to avoid a retest of Tuesday’s low of 86.13 during the nearfuture.
Technical Outlook: The market broke to a new contract low. Daily stochastics declining intooversold territory suggest the selling may be drying up soon. The close below the 9-day moving average is anegative short-term indicator for trend. The close below the 1st swing support could weigh on the market. Thenext downside target is now at 85.54. The 9-day RSI under 20 suggests the market is extremely oversold. Thenext area of resistance is around 87.19 and 87.78, while 1st support hits today at 86.07 and below there at 85.54.