© Dukascopy Bank SA
"There's some concern about the actual strength of the underlying economy and how far the Fed will increase interest rates, if at all. Longer term, it's down to what's the alternative to the U.S. dollar."
- Rochford Capital (based on Bloomberg)
Pair's Outlook
As it turned out, demand at 119 was insufficient to send the price through 120 in an instant. The bears here continue to resist development of a rally, but should eventually give in. The next objective will then be the 2014 high near 122. However, we still cannot rule out a dip beneath the 100-day SMA. While this will not necessarily mean a major reversal, it will imply a sell-off to 117, namely the 23.6% Fibonacci retracement of the Jul-Dec up-move.
Traders' Sentiment
The market appears to be strongly convinced the US Dollar is going to appreciate relative to the Yen. Three fourths of all open positions are long. As for the pending orders, 60% of them are set to purchase the Buck and thus to increase the share of longs even further.
© Dukascopy Bank SA