The December Yen went through another bumpy night of trading, but failed to take out yesterday’s 51/2-week high and may be vulnerable to a near-term pullback this morning. The Bank of Japan gave few signs that they will be letting up on their aggressive easing measures anytime soon, but their positive comments towards their economy provided little relief for Japanese equities as the Nikkei finished with close to a 5% weekly loss. Anxiety both at home and abroad is fueling the Yen’s flight-to-safety support, but the inability to move above the late September highs as well as yesterday’s monthly high may encourage some end-of-week long liquidation. The December Yen could retest the 102.70 overnight low again this morning, but will remain the safe-haven destination of choice as long as Washington budget problems cast a shadow over global markets.
Technical Outlook
JPY (DEC): Rising stochastics at overbought levels warrant some caution for bulls. A positive signal for trend short-term was given on a close over the 9-bar moving average. With the close higher than the pivot swing number, the market is in a slightly bullish posture. The next upside objective is 103.74. The next area of resistance is around 103.30 and 103.74, while 1st support hits today at 102.32 and below there at 101.77.