USD/JPY extends recovery from 50% Fibo

Not only did the demand between 106 and 105.50 refuse to let USD/JPY to retreat more, but it also initiated a rally that resulted in a breach of an important resistance at 106.70. Now, being that there are no significant levels nearby, the currency pair has a good opportunity to reach the supply area around 108. If this obstacle is overcome as well, there will be few doubts regarding the Dollar's ability to get to the 2014's high at 110.

The traders are becoming sceptical regarding the ability of the U.S. Dollar to appreciate relative to the Japanese Yen—the percentage of short positions went up from 54 to 57% over the weekend, leaving the bulls in a more distinct minority with 43%.