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"I think the dollar will likely increase slowly over time."
- Osao Iizuka, Sumitomo Mitsui (based on MarketWatch)
Pair's Outlook
The channel USD/JPY is currently trading within is the result of the pair touching 38.2% retracement of the 2011-2015 up-move and the 200-week SMA that create solid support between 106 and 105.50 dollars. Being that last week the pair closed near the lower bound of the pattern, the outlook for this week is positive. Considering the daily technical indicators, the price is highly likely to revisit April low at 111.90 in the next several days.
Traders' Sentiment
The US Dollar is strongly overbought—as many as 76% of position open in the SWFX market are long. Nevertheless, for the time being this does not mean a sell-off, since 72% of orders placed 100 pips around the spot price are to purchase the Dollar against the Yen.
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