Safe Haven Cycle Accelerates On Worse Than Expected Retail Sales

USDJPY was already trading freely above its problematic 100 level. Along came another risk aversion cycle and once again the pair was driven back under 100.
Of course, this last strengthening move of the Japanese yen can still be seen as a technical correction against considerable losses it suffered lately. Pairs like EURJPY, AUDJPY, GBPJPY and USDJPY have preformed very strogly since February ‘09, and as you know markets never move “only up” or “only down”.

A report yesterday, showing U.S Retail Sales have dropped by -1.1%, much more than the expected 0.3% change, pusshed traders towards risk aversion positions in the forex market. (Retail Sales are the primary gauge of consumer spending, which accounts for a majority of overall economic activity).

This was enough to trigger a Yen strengthening move against all major pairs yestreday and this morning.

First support for USDJPY is at 97, the second support level would be around 95.8. A clear break under 95.8 might signal the end of the USDJPY uptrend which started on February this year and topped at 101.4 so far.
On the up side, any clear break above 100 should signal the end of the correction move.