With a clear lack of flight to safety support this week, the Yen has continued with a slow and steady grind tothe downside. Japanese Industrial Production posted its lowest monthly performance in over 3 years, adding to agrowing list of sluggish Japanese economic numbers that has more than offset any improvement on the inflationfront. Unless there is a surprising shift with Fed policy this afternoon, the Yen looks to remain squarely on thedefensive with a new monthly low below the 0.9770 level firmly in its sights.
Technical Outlook: Momentum studies are still bearish but are now at oversold levels and willtend to support reversal action if it occurs. A negative signal for trend short-term was given on a close under the9-bar moving average. There could be some early pressure today given the market’s negative setup with theclose below the 2nd swing support. The next downside target is 97.70. The next area of resistance is around98.13 and 98.35, while 1st support hits today at 97.81 and below there at 97.70.