USD/JPY headed towards 106.50

USD/JPY keeps grinding lower, as there are no significant concentrations of demand nearby. The closest price level that may act as a more or less reliable floor is at 106.50, where the 55-day SMA merges with the weekly S1. A little lower, namely at 105.89/58, there is the weekly S2 together with the monthly S1. In the long-term perspective, unless the support at 103 is broken, the outlook will stay distinctly bullish.

Despite the percentage of short positions falling, they are still in majority with 56% of the market (59% last Friday). In the meantime, there is no real difference between the numbers of orders placed to buy (53%) and to sell (47%) the Greenback.