The steady erosion of safe-haven support continues to weigh on the Yen early this week, which remainspinned down at the lower end of last Thursday’s massive intra-day price range. While Japanese equities havefound their footing after recent sluggish price action, it may be positive vibes out of China from this weekend’s inlineeconomic data and Third Plenum prospects that are helping to keep the Yen on the defensive this morning.With the Bank of Japan unlikely to let up on their aggressive easing measures anytime soon, the Yen may beheading down towards a retest of the key 100.00 level during the near future. The December Yen should findnear-term support around the 100.68 area, and will be looking for a revival of flight-to-safety flows in order torebound from these current low price levels.
Technical Outlook
JPY (DEC): The close below the 60-day moving average is an indication the longer-termtrend has turned down. The daily stochastics gave a bearish indicator with a crossover down. Momentum studiesare still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The close underthe 18-day moving average indicates the intermediate-term trend could be turning down. The swing indicator gavea moderately negative reading with the close below the 1st support number. The next downside objective is99.84. The next area of resistance is around 101.62 and 102.59, while 1st support hits today at 100.25 and belowthere at 99.84.