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"The market is expecting a little bit more from the Bank of Japan. The Bank of Japan is always going to do what it can to limit the appreciation of the yen"
- Rochford Capital (based on Bloomberg)
Pair's Outlook
USD/JPY has pierced through a downtrend resistance, but proved to be incapable of surging further by bouncing off 78.71. An interim support at 78.48/43 is being eroded and may soon give in, allowing the price to drop to 78.08/77.87, below which lies subsequent levels at 77.56 and 77.34/21. In order to change the long-term outlook to bullish, USD/JPY will have to overcome 79.48/55.
Traders' Sentiment
The portion of bullish traders has risen up to 74%, affirming growing conviction of the market in further appreciation of the greenback against the Japanese Yen. However, the pair is becoming overbought to a more significant extent, thus increasing downside risk. The ratio between buy and sell orders is 57% to 43%, accordingly.
© Dukascopy Bank SA