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"Divergence in favor of the dollar isn't going to come from the BOJ or European Central Bank easing. It's going to have to come from a Fed hike, but there's no clear indication yet that it's on the horizon."
- Amherst Pierpont Securities LLC (based on Bloomberg)
Pair's Outlook
The American Dollar suffered a heavy loss on Thursday, triggered both by the BoJ's decision and a poor reading of the US GDP. Even though the USD/JPY currency pair managed to close trade above the 108.00 major level, the 18-month low is still under the risk of being violated. Unless demand at this low is insufficient to trigger a rebound, the next target will be the support cluster around 106.65, represented by the Bollinger band, the monthly S3 and the weekly S2. Meanwhile, technical indicators are unable to confirm the bearish scenario completely, but no impetus today is expected to cause the bullish momentum to return after yesterday's slump.
Traders' Sentiment
Market sentiment remains unchanged, with bulls still taking up 74% of the market. The share of sell orders increased from 52 to 57%.
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