We think the Yen is temporarily oversold and due for some short covering action. However, disappointmentfrom a Japanese business mood survey and fears of further declines in Japanese inflation readings should keepup the pressure on the Yen going forward. Look to sell a rally back to 92.32.
Technical Outlook: The market made a new contract low on the break. A crossover down in thedaily stochastics is a bearish signal. Daily stochastics are trending lower but have declined into oversold territory.The market’s short-term trend is negative as the close remains below the 9-day moving average. The marketsetup is somewhat negative with the close under the 1st swing support. The next downside target is now at 91.58.With a reading under 20, the 9-day RSI indicates the market is extremely oversold. The next area of resistance isaround 92.28 and 92.55, while 1st support hits today at 91.80 and below there at 91.58.