Mizuho Corporate BankTechnical Analysis 02 August 2010 Monthly Outlook for JPY JPY=EBS, Last Quote [Candle] Monthly 28Aug05 - 01Oct10 Sep05 Jan06 May Sep Jan07 May Sep Jan08 May Sep Jan09 May Sep Jan10 May Sep Pr86 88 90 92 94 96 98 100 102 104 106 108 110 112 114 116 118 120 122 JPY=EBS , Last Quote, Candle 31Aug10 86.30 86.83 86.20 86.79 Comment: We continue to favour a series of concerted downside tests of key support between 87.00 and 85.00 this summer. As year-ago consensus opinion had it at 98.00 by now, and currently forecasts 98.00 in a year’s time, it suggests entrenched views and a reality disconnect. In July and August last year Mizuho had it at 85.00 by now – close but too early as is so often the case with Technical Analysis. The 87.00 level is its mean regression level since 1980, so while the authorities might fret and mutter, the yen is not ‘expensive’ against the US dollar as it was in 1995 (all-time low 79.75 and well over two standard deviations below the mean). We would not rule out a breakand ‘spikes’ below here over the next three months. A monthly close above 90.00 would force us to adjust. Chart Levels:Support Resistance Direction of Trade 85.95 87.75 84.82* 88.15 83.60 89.20/89.50* 82.80 90.25 81.50* 79.75*** 91.00* 95.00** Produced by London Branch - Nicole Elliott +44-20-7786-2509The information contained in this paper is based on or derived from information g enerally available to the public from sources believed to be reliable. No representation or warranty is made or implied that it is accurate or complete. Any opinions expressed in this pap er are subject to change without not ice. This paper has been prepared solely for information purposes and if so decided, for private circulation and does not constitute any solicitation to buy or sell any instrument, or to engage in any trading strategy. Charts provided by Reuters.
