© Dukascopy Bank SA
- Noriaki Murao, Bank of Tokyo-Mitsubishi (based on Bloomberg)
Pair's Outlook
USD/JPY has finally escaped the boundaries implied by the falling wedge pattern. Accordingly, the following few trading days could be characterised by elevated volatility, which should help the pair to negate the latest losses. Since the 100-day SMA is already out of the way, the next target is the monthly PP at 103.04, which is reinforced by the 23.6% Fibonacci retracement of the Nov-Dec surge.
Traders' Sentiment
The percentage of long positions in the market drifted even further away from its 10-day average (63.5%) up to 74%, as more and more traders believe that the U.S. Dollar will outperform the Japanese Yen. At the same time the portion of buy orders soared, from 52% up to 65%.
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