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"Prolonged negotiations over the fiscal cliff create a risk-off environment. The yen would be bought against the dollar in that situation. From the perspective of economic fundamentals, the euro is more likely to edge down"
- Mitsubishi UFJ Morgan Stanley Securities Co. (based on Bloomberg)
Pair's Outlook
The closer USD/JPY approaches a 20-month high at 84.17, the harder it gets for bulls to push the currency pair higher, as demonstrated by recent behaviour of the price. Nevertheless, the positive bias, confirmed by most daily and weekly technical studies, is preserved. Accordingly, the most likely targets are at 81.92 and 82.15, while a more serious challenge for the rally will be at 83.23/47.
Traders' Sentiment
A substantial part of market participants, namely 68% of the market, consider USD/JPY to be bullish, since they hold long positions on the pair. Conversely, 32% of traders expect the Yen to gain value. As for the orders, 89% of them are to acquire the buck and 11% are to sell it against the JPY.
© Dukascopy Bank SA