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"The market's looking at the discussion of the possibility of a Japanese election as a negative for the yen. Pressures are likely to remain in place as long as the incentives to invest abroad are in place and the Japanese economy underperforms."
- Citigroup (based on Bloomberg)
Pair's Outlook
USD/JPY pair took a pause below the weekly R1 at 115.87, as it is preparing to commence a strong bullish move in the nearest future. This idea is suggested both by daily and weekly technical indicators, which give confident bullish signals at the moment. Moreover, the pair is well supported by demand at 114.78, represented by monthly R1, 2007 Dec high and weekly PP. Thus, a decline of the pair is unlikely and we can wait for it to gain more value.
Traders' Sentiment
The SWFX is largely undecided with respect to the future of USD/JPY—45% of positions are long and 55% are short. Pending orders, in turn, had no major changes as well, with 65% and 67% of them set to buy the US dollar in 50 and 100-pip ranges, respectively.
© Dukascopy Bank SA