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"Every time we see risk aversion, we see the market paring back short euro positions, short yen positions."
- Nordea Bank (based on Reuters)
Pair's Outlook
The USD/JPY suffered a 44-pip loss yesterday, with the immediate support cluster preventing the pair from maintaining trade lower. The Yen remains strong due to ongoing oil price slump, with buoyant fundamentals providing an extra boost. The 20-day SMA is now the closest support, but a fall towards the cluster around 122.30 is possible, as demand for safe haven currencies (such as the Yen) is higher. Meanwhile, technical studies now have a proper sense of direction, emitting bearish signals in the daily timeframe.
Traders' Sentiment
Exactly three quarters of all open positions are now short (previously 71%). At the same time, the number of orders to acquire the US Dollar added four percentage points, up to 68%.
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