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"Short-term traders like hedge funds are adjusting their positions and that's impacting the market. Futures led the cash market lower, the yen's gain followed and that caused a further drop in shares."
- Kabu.com Securities Co. (based on Bloomberg)
Pair's Outlook
Pair was sold of till 97 JPY, but did not receive a strong bullish impetus from it. This prevented the pairs recovery as it has been hovering below the 20-day SMA. Recently, weekly PP added to the pressure as well. We don't see the pair picking up any time soon, but do not anticipate any major failures either. It seems it might stay somewhat range bounded between 98.83 JPY and 96.58 JPY.
Traders' Sentiment
It is very unlikely we will see any major changes in the market sentiment in the nearest future. It seems so due to the fact that bulls continue to account for more than 70% of market participants and bullish side of pending orders is at 67% level, which is 6% more than before weekend.
© Dukascopy Bank SA