USD/JPY attempts to surge further up

Source: Dukascopy Bank SA
© Dukascopy Bank SA
"Expectations of large fiscal stimulus following Abe's big election win is behind the weakness in the yen."
- Australia & New Zealand Banking Group (based on Business Recorder) 


Pair's Outlook 
In the wake of a weaker Yen the USD/JPY currency pair surged more than 200 pips yesterday, providing a solid confirmation of a six-month trend-line. The US Dollar is now likely to continue outperforming the Japanese currency, retaining Monday's momentum. The 20-day SMA is the closest resistance, but the exchange rate has the potential to climb over the 104.00 major level, where the weekly R2 coincides with the monthly PP. However, we should not rule out the possibility of the pair undergoing a corrective decline, as technical indicators are giving unable to confirm the positive outlook. In this case the weekly R1 at 102.26 will be the nearest level to limit the losses. 

Traders' Sentiment 
Although not as strong as yesterday, but market sentiment remains bullish at 68%. The share of buy orders inched up from 32 to 61%.
© Dukascopy Bank SA

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