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"A dramatic pull-back in GPIF-related outflows from Japan, plus continued retail investor caution in circumstances of a rapidly expanding current account surplus will act to limit yen weakness from here."
- Bank of Tokyo-Mitsubishi UFJ (based on WBP Online)
Pair's Outlook
Weak US fundamentals and a stronger Yen pushed the USD/JPY back under 123.00 yesterday. The immediate support cluster, however, managed to hold the losses, while the pair appears to be consolidating between 122.70 and 123.30 this week. Technical indicators keep showing a rally is due, with the exchange rate returning above the major level of 123.00. The up-trend, on the other hand, might not be reached, unless the US currency receives a strong boost in order to pierce 123.20—where the up-trend coincides with the weekly R1.
Traders' Sentiment
Market sentiment is recovering, with 71% of all positions still short (previously 72%). The share of buy orders edged up from 67 to 72%.
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