© Dukascopy Bank SA
In case of the previous week, the pair experienced purely bullish tendency almost during the whole week despite the disappointing US data. The US new home sales and the Dallas Fed manufacturing index undershooting expectations, adding to the downward Greenback pressure. However, in the middle of the week, the pair experienced change in the tendency, since the Japanese yen added more gains on Thursday after Bank of Japan Governor Haruhiko Kuroda dashed expectations for more stimulus, pushing pair up for the 300 pips. The Bank's decision do not provide additional stimulus to the struggling Japanese economy has prompted some investors and traders to bet that policy makers are out of bullets, clearing the path for further gains in the yen. The BoJ will leave the annual pace of expansion of the monetary base unchanged at 80 trillion yen and a 0.1% negative interest rate. The Japanese yen extended its post-BoJ gains and hit fresh 18-month high on Friday due to the weak US data, while Japanese traders are taking day off celebrating the 'Showa Day'.
It seems that traders are getting more optimistic about the pair as well, as the proportion of bulls rose above 60%, from 43% a couple of weeks earlier. Nevertheless, the pair is expected to reach 108.60 by this Friday. The overall sentiment is still bullish, with 68% of all opened positions being long, while attitude towards the greenback is still extremely bullish.
© Dukascopy Bank SA