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"It's been a very yen-weakening, dollar-bull-run story for three years now, so you would have to think that there were significant yen-short positions built up over that time and there's a lot of room for a correction in that particular position."
- State Street Global Markets (based on CNBC)
Pair's Outlook
The USD/JPY currency pair dropped below 120.00 last Friday, reaching a fresh weekly low. However, trade closed at the major level of 119.00, but leaving room for more weakness. Despite making attempts to rebound on Monday, the Buck risks edging lower again, as technical studies retain their bearish signals, and the 20-day SMA just crossed the 100-day one to the downside, providing a signal to sell the US Dollar. Immediate support now rests near the 118.00 psychological level, represented by the weekly S1.
Traders' Sentiment
Bullish sentiment, on the other hand, improved significantly, as almost three quarters of all positions are now long, namely 73%. Meanwhile, the portion of buy orders declined from 58 to 36%.
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