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"Concerns caused by oil's slide and Greek politics are roiling equity markets globally. If declines in stocks continue, within a couple of weeks we could see the yen strengthen back to around 114 per dollar."
- Money Square Japan Inc. (based on Bloomberg)
Pair's Outlook
USD/JPY returned to the rising support line at 119, which is supposed to stay intact for the medium-term bullish outlook to remain valid. However, there are also solid supports standing at 118 (23.6% Fibo) and at 117 (55-day SMA) and preventing disorderly depreciation of the greenback in case of a bearish break-out. At the same time, this may significantly delay recovery of the US Dollar, since an immediate bounce-back will be highly unlikely.
Traders' Sentiment
Despite the increasing volatility in USD/JPY the market participants are not tilted to either side—51% of positions are long and the remaining 49% are short. Meanwhile, the percentage of buy orders fell from 77 to 63%, meaning the support is gradually weakening.
© Dukascopy Bank SA