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"With USD positioning now substantially reduced and the USD trading at more attractive levels versus key G10 currencies, we think the USD is more likely to gain immediately in the aftermath of Fed tightening."
- BNP Paribas (based on Reuters)
Pair's Outlook
The USD/JPY rebounded from its intraday low yesterday, after the inflation data sparked more hope of the Fed raising interest rates today. The immediate resistance cluster, however, managed to stop the rally at 121.65 and is now providing rather strong support. In case the Fed does not disappoint, the resistance around 122.40 is likely to give in and trigger a USD buying spree, which, in turn, could lead the Buck even towards the Nov high at 123.75. An unexpected delay of the rate hike is to cause a sharp sell-off, but without the violation of the three-year up-trend around the 119.00 major level.
Traders' Sentiment
Bears are outnumbering the bulls by only 2% points, whereas the portion of orders to buy the US currency dropped from 56 to 44%.
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