The December Yen continues to be the main beneficiary of today’s risk aversion mood in global markets, although prices were unable to build upon a fresh 1-month high during overnight trading. US and Italian risk concerns have been driving flight-to-safety flows into the Yen, which has been given additional fuel by uncertainty over potential Japanese corporate tax cuts as well. Mixed results with last night’s Japanese data could indicate that recent strength may evaporate quickly when global risk appetites are revived but for now, the Yen is likely to remain fairly well supported during today’s trading session. The December Yen may climb up towards the 102.52 level later on this morning, and will hold the upper hand on most major currencies as long as Washington political discord and risk aversion dominate global markets.
Technical Outlook
JPY (DEC): The market now above the 60-day moving average suggests the longer-term trend has turned up. Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. A positive signal for trend short-term was given on a close over the 9-bar moving average. Market positioning is positive with the close over the 1st swing resistance. The next upside target is 102.64. The next area of resistance is around 102.31 and 102.64, while 1st support hits today at 101.34 and below there at 100.69.