The Yen’s appreciation against the Dollar has carried through our 1st tier uptrend line and the psychological 95 level, two important technical supports. Meanwhile, U. S. equities, crude, and gold are trading sharply lower. Hence, we are witnessing broad-based risk aversion. Though the USD/JPY’s sell-side volume remains subdued, downward momentum across the marketplace is a bit disconcerting.

The slowdown in the recovery of global economic data is giving investors ample reason to lock-in profits and head for safety. The Yen is benefitting from the shift, much to the BOJ’s chagrin. Investors should keep an eye on the S&P futures and monitor their ability to stay above our 1st tier uptrend line and previous August lows. If the S&P futures experience a technically significant setback, the USD/JPY could be under increasing sell-side pressure.

Japan will kick-off next week by releasing its Prelim GDP number. Analysts are expected Japan’s GDP to turn positive after a dismal start to 2009. If Japan’s Prelim GDP number comes in at or above analyst expectations investors could continue to favor the Yen amid weakness in U. S. consumption and employment data. However, weaker than expected GDP data could help stabilize the USD/JPY. Technically speaking, bulls are hoping the USD/JPY can pop back above our 1st tier uptrend line due to its past relevance. The currency pair has our 2nd tier downtrend line to fall back on for right now, though this trend shouldn’t provide too much support.

Present Price: 94.70

Copyright 2009 FastBrokers, Latest Forex News and Analysis for Forex, Bullion and Commodity Traders.

Disclaimer: For information purposes only. FastBrokers assumes no
responsibility or liability from gains or losses incurred by the
information herein contained. There is a substantial risk of loss in
trading futures and foreign exchange.