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- Mizuho Securities Co. (based on Bloomberg)
Pair's Outlook
After a brief pause on Monday USD/JPY resumed the sell-off from 107. However, right now the currency pair is facing a major demand area on the outskirts of 100, created by the 2014 low and 50% retracement of the 2012-2015 move at 107. A month ago a similar attempt of the pair to break this level failed, but this time the support area has no reinforcement in the form of the lower bound of the nine-month bearish channel, which increases the chance of the bearish outcome. At the same time, the technical indicators are mostly pointing lower.
Traders' Sentiment
Positioning in the market also favours a decline, as the US Dollar is strongly oversold against the Japanese Yen: nearly two thirds of all open positions are long. Meanwhile, the numbers of buy and sell orders are perfectly equal.
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