JPY Mid-day Analysis

The September Yen has extended last Friday’s rebound from just above the 100.00 level with substantial early-week gains, as flight-to-safety support continues to flow back across the Pacific and into Yen this morning. While recent Japanese economic data have posted mixed results, a positive year-on-year CPI reading and a drop below the 4.0% Unemployment level are being seen by many traders as keeping the BOJ from ramping up their fresh aggressive easing measures at this week’s meeting. With uncertainty over Chinese economic data late this week also providing a fresh source of anxiety throughout Asian markets, the Yen is likely to hold onto early gains through the balance of today’s trading. Until Japanese equities can regain their footing, the Yen should remain well supported early this week. The September Yen may rise up towards the 101.80 level later in today’s trading, but would need a fresh risk event in order to see a retest of the late July highs.

Technical Outlook

JPY (SEP): The market now above the 60-day moving average suggests the longer-term trend has turned up. Momentum studies trending lower at mid-range should accelerate a move lower if support levels are taken out. The cross over and close above the 18-day moving average indicates the intermediate-term trend has turned up. The upside closing price reversal on the daily chart is somewhat bullish. The market has a slightly positive tilt with the close over the swing pivot. The next downside target is 99.57. The next area of resistance is around 101.80 and 102.26, while 1st support hits today at 100.46 and below there at 99.57.

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