© Dukascopy Bank SA
"All roads lead to a higher U.S. dollar. The Fed's the only one that people can see tightening this year."
- Commonwealth Bank of Australia (based on Bloomberg)
Pair's Outlook
Since the support at 118 failed to withstand the selling pressure, USD/JPY is now exposed to a decline to 116.0/115.5, where the monthly S1 level is reinforced by the 38.2% Fibo. This zone should act as a floor in the medium term and prevent any attempts of the bears to push the price lower. The US Dollar still retains a notable bullish potential and in the long run should surpass the 2014 peak at 122, which in turn may open a path to the 2007 high at 124.
Traders' Sentiment
The current share of bulls is slightly lower than it was yesterday, but this does not change the overall picture, a considerable majority of traders holds long positions (65%). The percentage of buy orders dropped as well, but to a greater extent, from 64 to 60%.
© Dukascopy Bank SA