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"What (investors) are seeing now is that (Japanese) policymakers aren't providing the support for dollar/yen that they would have expected. That's creating some degree of confusion, and of course, prudent risk management suggests one scales back on short positions."
- Credit Suisse (based on Reuters)
Pair's Outlook
As was anticipated, the USD/JPY currency pair slumped after BoJ Kuroda's statement yesterday, with the exchange rate reaching a fresh 18-month low of 107.67. However, the Buck stabilised slightly higher at 108.17, after having plunged for five days in a row. The newly-formed 18-month low is expected to provide sufficient support to keep the Greenback from falling deeper. Technical studies remain retain mixed signals, suggesting that the US currency might rebound today, if demand at the new low provided sufficient impetus for the recovery. In this case, the nearest resistance will be the cluster around 108.75, represented by the weekly S3, the monthly S2 and the Bollinger band.
Traders' Sentiment
Today 74% of all open positions are long (previously 73%). Meanwhile, the portion of orders to buy the US Dollar declined from 62 to 51%.
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