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"If they [the BoJ] do surprise and expand their asset-purchase program again, the reaction will be relatively subdued and short lasting"
- Citigroup (based on Bloomberg)
Pair's Outlook
USD/JPY is currently attempting to recover from 78.87 (200 day SMA), although the gains should remain tepid, being that the pair is closing in to a downtrend resistance, which has been respected by the market since Mar 15. As suggested by most of daily indicators, USD/JPY is now supposed to resume falling, resulting in a dip down to 77.04/76.94, where bullish momentum could be invoked.
Traders' Sentiment
Given that the Japanese Yen is currently the least preferred currency in the foreign exchange market, USD/JPY is overbought to a significant extent, namely the pair is 73% bullish and only 27% bearish. Nevertheless, situation with orders within 100 pips from the current price is not as straightforward, as orders to buy and sell constitute nearly the same shares - 51% and 49%, respectively.
© Dukascopy Bank