© Dukascopy Bank
"If the BOJ takes no new steps, the yen may rise briefly on disappointment among some traders"
- UBS (based on WSJ)
Pair's Outlook
USD/JPY is consolidating ahead of 78.86 (200 day SMA), implying the increasing possibility of retesting a downtrend resistance that has blocked the road towards 82.91. Nonetheless, the currency pair is viewed by most of technical indicators as bearish and therefore yet unable to overcome 79.57/78. Consequently, we are likely to observe a dip down to 77.04/76.92 before bullish momentum is reignited again.
Traders' Sentiment
The share of long positions has increased up to 75%, implying growing conviction of market participants in appreciation of the US Dollar relative to the Japanese Yen, even though the extent, to which the pair is overbought at the moment, suggests heightened possibility of a dip, once bullish trades start being closed, an example of which has been observed just recently.
© Dukascopy Bank