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"The yen remains significantly undervalued according to our long-term valuation models leaving plenty of scope for further yen strength if global financial market conditions continue to deteriorate."
- Bank of Tokyo-Mitsubishi (based on WBP Online)
Pair's Outlook
The US Dollar sustained a rather heavy loss against the Japanese Yen yesterday, finding support only closer to the third target level. The Yen keeps strengthening and is expected to outperform the Buck for the fourth consecutive day today. The Bollinger band and the weekly S2 provide immediate support circa 113.15, but a drop deeper down, namely towards the monthly S3 at 111.78, is more probable. However, if bulls do manage to push the USD/JPY higher, strong supply is likely to limit the gains around the major level of 114.00.
Traders' Sentiment
A gradual development was seen in share of long positions, as it doubled since yesterday, now taking up 52% of the market. Pending orders are equally divided between the buy and the sell ones.
© Dukascopy Bank SA