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"The recent weak ISM data clearly illustrated the negative impact of the dollar's appreciation. The US stock market may continue to be fragile, which is likely to discourage USD/JPY buying."
- MUFG (based on FXStreet)
Pair's Outlook
The US Dollar's losses slightly exceeded expectations, as the pair stabilised at 122.59, rather than in front of the weekly PP at 122.74. Nevertheless, the USD/JPY is now facing a rather strong support cluster around 122.30, represented by the monthly PP, the weekly S1 and the Bollinger band. The pair's exchange rate still has a 20-pip space to edge down, or even breach the immediate support cluster in case the Payrolls data disappoints too much; but the base case scenario is a rally towards the 20-day SMA and a possible retest of the weekly R1 at 123.22.
Traders' Sentiment
Bearish market sentiment remains unchanged at 71%, whereas the number of purchase orders slightly dropped, from 68 to 65%.
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