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"If we are correct with our call for a more challenging Late Cycle investment environment, expect the JPY to enjoy many more days similar to those seen in the middle of August when it looked like the PBOC was de-valuing the CNY."
- ING (based on FXStreet)
Pair's Outlook
As was anticipated, the USD/JPY dropped lower through the end of the previous week, after the head of BoJ stated that further QQE in Japan is unlikely. As a result, the Greenback reached a new two-month low against the Yen, eager to recover from these losses today. A correction is possible, but the weekly pivot point is providing resistance at 120.57. Meanwhile, the Bollinger band and the weekly S1 form a support cluster around 119.70, while technical studies indicate another slump is due. Nevertheless, a correction might prevail after the pair plunged for six consecutive days.
Traders' Sentiment
Market sentiment keeps improving, as 65% of all positions are short (previously 68%). The share of buy orders edged up from 49 to 59%.
© Dukascopy Bank SA