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"More declines in the Chinese stock market and another devaluation of the CNY would hit Japanese companies on a myriad of fronts: less Chinese tourists, weakened Chinese purchasing power, and increasing Chinese export competitiveness."
- IG Securities (based on WBP Online)
Pair's Outlook
The USD/JPY currency pair reached the tough support cluster at 123.65, which pushed the Greenback slightly back up. Ultimately, the Buck closed trade just under the major level of 124.00 at 123.92. Although the pair remains close to the strong cluster of supports, risks of falling even closer persist, the US Dollar is struggling to pierce the 124.00 psychological level and technical indicators shifted from bullish to mixed. The base case scenario, however, is a rally towards 124.30, namely the 20-day SMA.
Traders' Sentiment
Exactly three quarters of traders hold long positions today, up from 66%. At the same time, the number of orders to acquire the Greenback declined from 64 to 59%.
© Dukascopy Bank SA