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"Investors' risk aversion has started to recede. Exporters generally estimate the currency at 93.5 yen to the dollar, so the yen's level now raises optimism that we'll see upwards earnings revisions in the next reporting season."
- Okasan Securities Co. (based on Bloomberg)
Pair's Outlook
Pair clearly broke out of the downtrend (since 7th of July) and at the moment is aiming at major level at 100 JPY. Short term Stochastic indicator sends sell signal suggesting we could see a minor sell off, but 100-day SMA/weekly R1 should maintain pairs bullishness. Taking in to account recent market sentiment dynamics is seems we are observing a start of a major rally.
Traders' Sentiment
Bulls took a significant blow in the market. At the moment they account for 53%, in comparison to 75% yesterday, of all market participants. Distribution of pending orders became noticeably more bearish as well—56% are set to go long when it was 60% yesterday.
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