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"Instability in the Middle East might lead to the yen being bought against the dollar, but that might be temporary as higher oil prices would support the economy of the United States, a major oil exporter, in the longer term."
- BBH (based on Reuters)
Pair's Outlook
Last week the USD/JPY currency pair retested the 120.00 major level and closed slightly higher—at 120.23. On Monday the USD weakened against the JPY significantly, the demand for which rose after Chinese data disappointed. As a result, the given pair fell to a fresh two-month low, and keeps edging lower towards the Oct 2015 low. The second cluster's lowest level, namely the monthly S1 at 118.93, has a chance to cause a rebound in the American session; however, the pair is still likely end the day in the red zone, as no impetus today will be strong enough to negate all losses.
Traders' Sentiment
Bearish traders' sentiment remains unchanged at 59%, whereas the portion of orders to acquire the US Dollar increased from 57 to 71%.
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