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"Treasury yields will have to consolidate first before the dollar can test further upside. In addition to yields, we are watching how risk assets fair amid the current global events."
- a trader at a Japanese bank (based on Reuters)
Pair's Outlook
Strong fundamentals helped the US Dollar to break out of the recent trading range, as it closed above 119. However, there are still plenty of resistances overhead that may prevent further appreciation of the currency. The first one is near 120, the current location of the weekly and monthly R1s. This supply area is followed by formidable levels at 121 and 122 that did not let USD/JPY to keep traveling north in December of 2014.
Traders' Sentiment
Despite the massive gains of USD/JPY last week, the distribution between the longs (61%) and shorts (39%) is relatively unchanged. The portion of the order to purchase the Buck, on the other hand, jumped from 68 to 86%.
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