Another bumpy night of trading has left the Yen back near unchanged levels, as the ebb and flow of safehavensupport has kept prices bouncing back and forth with little overall direction. Japanese equities have easedoff of their recovery rally and provided a modest source of home-based strength for the Yen, but it clearly will be events in Washington that will drive the market during today’s session. Signs that a US debt deal will becompleted should reverse flight-to-safety flows and send the Yen down to a new monthly low but until thathappens, prices should hold their ground near the middle of this week’s trading range. The December Yen mayslide down towards the 101.58 area this morning, and will be watching developments in Washington very, veryclosely.
Technical Outlook
JPY (DEC): The market back below the 60-day moving average suggests the longer term trend could be turning down. Declining momentum studies in the neutral zone will tend to reinforce lowerprice action. A negative signal for trend short-term was given on a close under the 9-bar moving average. Withthe close higher than the pivot swing number, the market is in a slightly bullish posture. The next downside targetis 101.13. The next area of resistance is around 102.02 and 102.24, while 1st support hits today at 101.46 andbelow there at 101.13.