USD/JPY's upward momentum to be tested by 108

USD/JPY is approaching the supply area formed by the weekly and monthly R3 levels, which can throw the price back to 106. However, considering that on the weekly and monthly time-frames the indicators are mostly giving ‘buy' signals, the medium-term outlook will remain bullish as long as the up-trend at 105.50 is intact. Otherwise the bears may exploit a good opportunity to push the Dollar down to the July high 103.

Just as yesterday, an overwhelming majority of the market participants believes that the Yen is undervalued and should therefore appreciate relative to the Greenback. As for the orders, there is no difference between the buy (52%) and sell (48%) ones.