Mizuho Corporate Bank

Technical Analysis 02 August 2010

Monthly Outlook for JPY
JPY=EBS, Last Quote [Candle] Monthly
28Aug05 - 01Oct10
Pr
JPY=EBS , Last Quote, Candle
31Aug10 86.30 86.83 86.20 86.79
122

120

118

116

114

112

110

108

106

104

102

100

98

96

94

92

90

88

86

Sep05 Jan06 May Sep Jan07 May Sep Jan08 May Sep Jan09 May Sep Jan10 May Sep

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 break
and ‘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**

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