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"There's going to be no change to the BOJ's stance so long as they're short of their inflation goal. Sentiment today is looking a little bit better, so I think that's pretty much consistent with a little bit of softening in the yen"
- Sacha Tihanyi, Bank of Nova Scotia (based on Bloomberg)
Pair's Outlook
USD/JPY has just rallied above resistance at 78.33/39 and preserves bullish impetus in order to challenge a subsequent level at 78.64/71 and overcome it. Additional resistances are located at 79.01/04 and 79.29/50 and will be harder to breach, being that a 100 day SMA (79.36) has been hovering above the price for more than three months. The main support is at 78.01/77.98, preventing extension of possible dips.
Traders' Sentiment
USD/JPY retains potential to step higher. On the one hand, bullish traders have been forming the majority (71%) in the market for the prolonged period of time. On the other, distribution between buy and sell orders also supports bullish outlook on the pair, being 61% to 39%, accordingly.
© Dukascopy Bank SA