The Yen is getting very little upside traction this morning as it has been unable to fully shake off talk of aJapanese “snap” election. Overnight data on Japanese Machinery Orders were well above market forecasts,which indicate how difficult it has been for the Yen to get past both the election and sales tax delay talk this week.While the Yen would certainly benefit from any weakness in US data this morning, the upside remains limited untilthe Japanese government makes its future policy known to the market so any rally back above the 87.00 is likelyto be seen by the bears as a selling opportunity.
Technical Outlook: Daily stochastics declining into oversold territory suggest the selling may bedrying up soon. The market’s close below the 9-day moving average is an indication the short-term trend remainsnegative. The market tilt is slightly negative with the close under the pivot. The next downside objective is 85.82.Selling may soon dry up since the RSI is under 20 indicating the market is extremely oversold. The next area ofresistance is around 86.91 and 87.37, while 1st support hits today at 86.13 and below there at 85.82.