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"Given the still-strong correlation between the equity market and the yen, it still suggests more upward momentum for dollar/yen."
- Barclays (based on CNBC)
Pair's Outlook
As it turned out, there was no need for a pronounced bearish correction in order for USD/JPY to re-challenge a major resistance at 117. However, this level is still intact, meaning there is a chance the US Dollar will fail to visit the 2007 Oct high before the end of this week. In such a case the demand at 114.80, implied be the 2007 Dec high and monthly R1, will be expected to act as a floor and prevent additional losses.
Traders' Sentiment
The sentiment of the SWFX market remains neutral towards USD/JPY, as the difference between the longs and shorts is minimal—only two percentage points. Meanwhile, the portion of sell orders surged from 45 to 59%.
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