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"Investors are reacting positively to the prospect of a sales tax delay and an additional fiscal package. The fact that Aso has individually commented on this has a large impact."
- Securities Japan (based on Bloomberg)
Pair's Outlook
Although the daily technical indicators are mostly bullish, short-term long positions are becoming risky, as the currency pair is approaching the upper bound of the recently established ascending channel. The present rally is expected to end near the level of 112 yen, before the pair reaches the 100-day simple moving average at 112.40. If this is the case, the ensuing downward correction should then be limited by the lower bound of the pattern (currently at 110 yen), presumably by 110.50.
Traders' Sentiment
There are almost as many as three times more bulls in the SWFX market than there are bears, which does not bode well for a prolonged US Dollar recovery. Nevertheless, right now there are a lot more orders to buy the Greenback (64%) than there are to sell it (36%).
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