© Dukascopy Bank SA
"I don't think many people were expecting the BOJ to make a move right after the FOMC, so the timing of the announcement came as a surprise. But upon closer inspection the contents show that the BOJ merely fine-tuned its policy, which is why the dollar came down."
- Sumitomo Mitsui Trust (based on Reuters)
Pair's Outlook
The USD/JPY tested the weekly R1 resistance at 122.78, but stabilised slightly lower at 122.55 yesterday. The Buck jumped to a three-week high of 123.55 today, due to the markets misinterpreting the BoJ's policy statement. Once the situation was reassessed, the pair retreated from the daily high and continued its way into the red zone. The Greenback remains supported by the strong cluster around 121.60, which is likely to limit the losses; however, volatility could stretch even further below. The bullish momentum might also be regained, but with the 123.00 level intact.
Traders' Sentiment
Exactly three quarters (75%) of traders are short the US Dollar today, while the number of sell orders increased from 60 to 66%.
© Dukascopy Bank SA