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- Merrill Lynch Japan Securities (based on Market Watch)
Pair's Outlook
The US Dollar took a breath on Monday, allowing the Japanese Yen to trim some losses. Nevertheless, it appears that the Greenback is back on track today and is ready to outperform the Yen once more. Technical indicators are also in favour of a rally, however, since the three-week ascending channel pattern was broken yesterday, risks of the bearish momentum continuing are still present. With a number of US fundamental data to drive the markets this week, the USD/JPY pair could experience serious volatility in either direction. In case bears take over today, the 111.00 mark is expected to hold, being bolstered by the weekly S1 and the monthly R3, while the ceiling is not determined.
Traders' Sentiment
Bears gave in again today, as 58% of all open positions are short (previously 62%). The share of buy orders surged from 46 to 48%.
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