Ongoing coiling in the Yen in the face of the Chinese stimulus move highlights a lack of conviction toward the yen in either direction. We get the sense that the January recovery effort has run out of momentum and that a slide back toward consolidation support of 84.31 is in order now especially if equities, currencies and oil markets continue to return to more normal trading patterns, as opposed to the patently deflationary drum beat seen over the last month.
Technical Outlook: Momentum studies trending lower at mid-range could accelerate a price break if support levels are broken. The close above the 9-day moving average is a positive short-term indicator for trend. The market’s close below the pivot swing number is a mildly negative setup. The next downside target is now at 84.56. The next area of resistance is around 85.44 and 85.85, while 1st support hits today at 84.80 and below there at 84.56.