USD/JPY closes in on 2007 Dec high

USD/JPY refused to fill the gap and kept on gaining ground, as was suggested by the near-term technical indicators. As a result, the pair needs to make one last push to reach an important milestone at 114.70—the 2007 Dec high and monthly R1. It is reasonable to expect some profit-taking in this area, but the US Dollar should preserve the overall upward momentum and keep moving towards its main target—the 2007 high at 124.

There has been a major repositioning of the SWFX market participants. While yesterday as many as 70% of all traders were bearish, today only 54% expect the Dollar to underperform relative to the Yen.