This weekend’s Iran nuclear deal had its most direct impact on the Yen, as the continued erosion of safehavensupport has taken prices to their lowest levels since late May. Buoyant Japanese equities and commentsby BOJ Governor Kuroda supporting “ultra-easy” policy until their 2% inflation target is reached have bothweighed on the Yen as well, which continues to slide in the wake of last week’s BOJ meeting. Unless the Yen canfind a fresh source of flight-to-safety flows, the market may be heading for a retest of the May 22nd low for 2013.The December Yen may find support around the 97.94 level and will continue to face headwinds fromimprovement with global risk sentiment early this week.
Technical Outlook
JPY (DEC): Daily stochastics declining into oversold territory suggest the selling may bedrying up soon. A negative signal for trend short-term was given on a close under the 9-bar moving average. It isa slightly negative indicator that the close was under the swing pivot. The next downside target is now at 98.41.With a reading under 30, the 9-day RSI is approaching oversold levels. The next area of resistance is around98.95 and 99.21, while 1st support hits today at 98.55 and below there at 98.41.