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"Monetary policy divergence and a weak euro already support the dollar, and a rise by equities - and thus enhanced risk appetite - will be key for further gains. The dollar will look to build a foothold above 122 yen depending on how U.S. stocks fare later in the session."
- IG Securities (based on Reuters)
Pair's Outlook
US Dollar started week by gaining value against the Yen. Even though the Greenback was seen to have enough strength to breach initial resistance level represented by the monthly R1, supply proved to be sufficient in order to stop the rally. USD/JPY settled at 121.13 and is likely to edge up further today, despite neutral technical indicators. Growth in Japanese Core Machinery Orders is expected to turn to negative side, thus putting pressure on the Yen, whereas the nearest resistance lies at the 2007 June 7 high at 121.70.
Traders' Sentiment
In the meantime, the market sentiment remains unchanged: 55% of positions are long. The number of buy orders in the 100-pip range from the spot added four percentage points to 67%.
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