Flight-to-safety flows from across the Pacific have helped the Yen stay clear of last Friday’s spike lows thismorning, but the market is showing few signs of regaining any large portion of last week’s severe downdraft.Japanese equity markets were on holiday today but finished last week on a 4-day winning streak, which hasclearly dampened the Yen’s safe-haven support going into this morning’s trading. The Yen will continue to benefitfrom Washington budget friction as long as long as any budget agreement remains elusive, but will need to seenconsistent strength from upcoming Japanese economic data to get out from under the Bank of Japan’s ongoingaggressive easing measures. The December Yen may climb up towards the 101.96 level later in the session, andstill remains vulnerable to a swift reversal of fortune if and when there are definitive signs of progress coming outof Washington early this week.
Technical Outlook
JPY (DEC): The major trend has turned down with the cross over back below the 60-daymoving average. Momentum studies trending lower at mid-range could accelerate a price break if support levelsare broken. The market’s short-term trend is negative as the close remains below the 9-day moving average. It isa slightly negative indicator that the close was lower than the pivot swing number. The next downside objective isnow at 100.98. The next area of resistance is around 101.88 and 102.37, while 1st support hits today at 101.18and below there at 100.98.