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"The market was caught long JPY amid the rapid build-up in expectation for easing. There should be further scope for a reversal to weigh on JPY ahead of the event."
- Citi (based on Reuters)
Pair's Outlook
The US Dollar declined against the Japanese Yen on Monday, with price moving slightly outside the lower boundary, amid the return of risk aversion. The risk-off sentiment keeps prevailing today as well, pushing the USD/JPY lower, ignoring the immediate support in face of the 20-day SMA. The next level to limit the dips rests around 117.75, represented by the weekly PP and the monthly S2. However, at this rate the Buck might even close trade below the second support cluster, as technical indicators also contribute to the negative outlook, with no clear signs of a possible rebound.
Traders' Sentiment
For the third consecutive day traders' sentiment remains bearish at 71%, whereas the share of purchase orders slid from 64 to 61%.
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