Archived IMT (2008.10.08)

103 YEN NEW RESISTANCE: USDJPY drops below the 100-yen level for the first time since April as the global market deleveraging rises to new heights despite todays coordinated rate cuts. From a short-term perspective, we could see renewed equity gains during the US session, which could once again flounder later in the session and force renewed losses back to as low as 97.00 later in the month. We mentioned in yesterday's article that further deleveraging as measured by NYSE margin debt usage is a reflection of the considerable leverage accumulated during the last bull market is now forcefully being undone by a powerful combination of margin calls and accelerating market losses, triggering broad ripples of sell orders among large and small investors. 103 yen is to become the major short term resistance in USDJPY, as bears produce lower highs. Interim resistance stands at 101.70, with support starting at 99.30, backed by 98.70.