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"I don't expect we'll see the continuation of a rally in dollar-yen given that the size of increase in the asset purchase is not that large in the grand scheme of things"
- Khoon Goh, Australia & New Zealand Banking Group Ltd. (based on Bloomberg)
Pair's Outlook
After breaking an uptrend support line USD/JPY did not give any hints on where it is intending to move and therefore is likely to stay flat for a while. Indicators' signals are mixed and equivocal, thus we are not yet able to estimate what scenario is most likely to unfold. Moreover, the pair is surrounded by resistances and supports that send the price up and down alternately.
Traders' Sentiment
Despite the narrowing difference between bullish and bearish towards USD/JPY market participants, the pair remains overbought to a considerable extent, since 72% of positions are still long and the Japanese Yen is the least popular currency among its major counterparts. Additionally, the overwhelming majority (72%) of orders placed on USD/JPY are buy orders.
© Dukascopy Bank SA