© Dukascopy Bank SA
"What's making the yen move is the better U.S. data and the fact that risk aversion in Europe continues to decline"
- Credit Agricole SA (based on Bloomberg)
Pair's Outlook
USD/JPY may yet again undergo a bearish correction before the recovery is recommenced. The price has just touched a five-month high and is expected to trim some of the recent gains. The pullback should not extend beyond 80.15, although we cannot rule out a possibility of a deeper retracement, resulting in a decline down to 79.64/55, where a previous correction was terminated.
Traders' Sentiment
SWFX traders' sentiment is unchanged towards USD/JPY, which is overbought to a significant extent. An overwhelming majority of market participants (74%) hold long positions, while merely 26% expect the Japanese Yen to appreciate relatively to the U.S. Dollar. Distribution of buy and sell orders gives an even a stronger signal, being 84% to 16%, accordingly.
© Dukascopy Bank SA