A sharp turnaround from overnight highs may not bode well for the Yen this morning, as the loss of safehavensupport is starting to take its toll on prices heading into the weekend. Sluggish Japanese equities may stillbe a source of strength for the Yen, but calmer Chinese risk concerns and the Dollar’s revival will make it difficultfor prices to regain lost ground without getting some “help” from a weak US ISM number later today. It may be theunwinding of Euro/Yen cross spreads that keeps the Yen from sustaining too much chart damage this morning, asthe likelihood of an accommodative Bank of Japan is going to weigh heavily on prices going forward. TheDecember Yen may retest its 50-day moving average at 101.66 later today, with a failure to hold that level leadingto a fairly bleak finish to the week.
Technical Outlook
JPY (DEC): Momentum studies trending lower at mid-range could accelerate a pricebreak if support levels are broken. The market’s short-term trend is negative as the close remains below the 9-daymoving average. The close over the pivot swing is a somewhat positive setup. The next downside objective isnow at 101.21. The next area of resistance is around 101.95 and 102.22, while 1st support hits today at 101.45and below there at 101.21.