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"The slide in Shanghai stocks is leading to yen buying. With risk sentiment deteriorating right now, anything obscure will lead to reducing positions."
- Credit Agricole (based on Bloomberg)
Pair's Outlook
Though the US Dollar strengthened on Friday, the currency does not seem ready to push through the supply at 118, represented by the weekly pivot point and 55-day SMA. If there emerges a decline as a result of an encounter with this resistance, it should be limited by the 38.2% retracement at of the Oct-Dec rally at 115.48. There is also a cluster of supports at 116.48/115.84, mainly created by the weekly and monthly S1 levels.
Traders' Sentiment
Since Friday there has been a marginal increase in the percentage of long positions—from 60 to 61%. At the same time, there are now less orders to purchase the greenback, compared to the previous report their share fell from 66 to 59%.
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