With a fresh ratings cut for Japan overnight, fresh chart damage and weak data flowing from China there would seem to be little to cause a reversal in the Yen’s downward motion. In fact, short covering bounces should be seen as selling opportunities until the Yen reaches down to 82.00. However, weakness in the Dollar, soft UK mortgage approvals and weak Euro zone factory order results temporarily take the pressure off the Yen.
Technical Outlook: The stochastics indicators are rising from oversold levels, which is bullish and should support higher prices. The market’s close below the 9-day moving average is an indication the shortterm trend remains negative. A negative signal was given by the outside day down. The close below the 2nd swing support number puts the market on the defensive. The next upside objective is 85.60. The 9-day RSI under 20 suggests the market is extremely oversold. The next area of resistance is around 84.79 and 85.60, while 1st support hits today at 83.69 and below there at 83.39.