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"Expectations that the BOJ would actually ease were low, so the yen's appreciation is within the limits of reason."
- Praevidentia Strategy (based on Reuters)
Pair's Outlook
Though USD/JPY managed to settle above 118 yesterday, at the moment the currency pair is under strong selling pressure after a test of the monthly pivot point at 119. Nevertheless, the support represented by the weekly PP and 23.6% Fibo may well prevent further depreciation of the US Dollar. This would mean the rate is ready to overcome supply at 119 and re-challenge late December highs around 121.
Traders' Sentiment
Despite the increased volatility of USD/JPY, the long-short ratio remains relatively stable. At the moment of writing 63% of open positions are long (62% yesterday). On the other hand, the share of buy orders declined, from 63 to 53%.
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