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"The market is shifting to a risk-off stance on the back of stocks declines and weaker Chinese economic data. The yen is being bought in a bid for safety"
- JPMorgan Chase & Co. (based on Bloomberg)
Pair's Outlook
USD/JPY was unable to sustain a rally and has quickly returned to 78.06/77.98. Moreover, being that it has formed a descending triangle and is approaching an intersection of a trendline connecting lower highs and of a strong horizontal support, the currency pair is likely to break out of the pattern and then aim for an interim support at 77.71/63.
Traders' Sentiment
SWFX traders' sentiment remains extremely bullish towards USD/JPY, being that 73% of the market stays long on the pair and only 27% of it hold short positions. This is also supported by the fact that the Japanese Yen is the least popular currency among its major counterparts. However, the portion of buy orders is only 46% of the total amount.
© Dukascopy Bank SA