USD/JPY successfully weathers selling pressure

Although there was expected a distinct bearish correction at least down to 106 (we should still not rule it out completely), the U.S. Dollar is holding fairly well during the current profit-taking. Accordingly, while the up-trend support line stays intact, the long-term bias towards USD/JPY will remain bullish, with the initial target being the monthly R3 at 108 and the next potential objective being the 2008 Sep high at 109.

Most of the SWFX market participants consider the Greenback to be overvalued relative to the Japanese Yen, since as many as 69% of open positions are short. Concerning the pending orders, still 62% of them are set to purchase the Buck.