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"Japan's economy will probably have two consecutive quarters of contraction in the July-September and October-December periods. Exports are the main reason for the economic contraction"
- Citigroup Global Markets Japan Inc. (based on Bloomberg)
Pair's Outlook
Range of USD/JPY narrows, as it is being contained by two converging lines. One of them has kept the price in a downtrend since March 15, while the other has underpinned the pair for nearly a year. Therefore we would expect a breakout of a downward sloping line due to support's seniority and a subsequent surge of USD/JPY above 78.41 en route to 79.65/79.
Traders' Sentiment
The gap between the bulls and bears has widened even further, as the share of long positions increased up to 74%, whereas the portion of short ones declined to 26%. Moreover, buy orders constitute 80% of all the commands and thus should provide a great deal of support to the pair in near future.
© Dukascopy Bank SA