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– - Eisuke Sakakibara, former Japanese vice finance minister (based on Bloomberg)
Pair's Outlook
USD/JPY is currently in the process of forming a new bearish wave. The pair is presently trading right in the middle of the descending channel that was initiated at the turn of 2015 and 2016. The pattern implies an extension of the current sell-off towards 98-97 yen. However, there is a massive demand area circa the round level of 100 yen that is unlikely to give in easily despite the bearish indicators. Apart from being a psychological level, this is the 50% Fibonacci retracement of the four-year rally that began in 2012 and the 2014 low. If this support is breached, our longer-term outlook will be changed to bearish.
Traders' Sentiment
Bulls continue to hold the majority, namely 58% of the market, despite a strong bearish rejection from 107. This makes USD/JPY vulnerable to an even deeper decline.
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