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"But it seems the market has been confused and gained perspective that the BOJ announcement revealed the limitations of what it can do. Due to concerns and confusion about the BOJ policy, the dollar will likely remain top heavy at this moment."
- Barclays (based on Market Watch)
Pair's Outlook
The tough cluster around 121.60 was unsuccessful at holding the losses last Friday, resulting in a slump to 121.14. Today the mentioned cluster is providing resistance, but gains could extend above that group of levels, as it failed to limiting volatility previously. According to technical studies, the US Dollar to decline again today; however, the monthly S1 was able to keep the USD/JPY afloat in December and is likely to do so again today, as it is reinforced by the Bollinger band. Meanwhile, the 55-day SMA crossed the longer period ones, providing a signal to buy the Buck.
Traders' Sentiment
Slightly less than three quarters (74%) of all positions remain short, while 58% of all orders are to acquire the Greenback (up from 34%).
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