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"While the dollar is still vulnerable to some additional near-term losses, we argue on both fundamental and technical grounds, it is premature to invest as if a new bear market for the dollar has begun."
- Brown Brothers Harriman (based on Reuters)
Pair's Outlook
Regardless of nearly all the indicators pointing up, the trading range of USD/JPY keeps narrowing. Right now the currency pair is probing resistance around 119.50, consisting of the monthly PP and 100-day SMA. However, even if the US Dollar succeeds, this is unlikely to lead to a strong recovery, since in a flat market the importance of this level is greatly decreased, as was the case for the past two months. Though we could see a test of the current May high at 120.50.
Traders' Sentiment
The bulls are attacking on both fronts. First, the share of open long positions went from 60 to 61%. Second, the advantage of commands set to purchase the Greenback 100 pips from the spot grew by 2 percentage points to 36%.
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