USD/JPY exposed to a dip to 116.00/115.50

Although the weekly S1 at 117 succeeded at preventing a decline in USD/JPY for a second time in a row, the short-term risks are to the downside. The currency pair is prone to falling back to 116.00/115.50 region. This in turn may lead to formation of a descending triangle that usually means weakening demand and an increased probability of a bearish break-out. However, as long as the 38.2% Fibo is safe, the overall outlook is considered to be positive.

Appreciation of the Dollar did not encourage more bulls to enter the market, and their portion declined from 59 to 57%. On the other hand, there are now considerably more people willing to purchase the Buck, three fourths instead of 56% observed yesterday.