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"We are seeing dollar strength coming back as the market increases their expectations for the possibility of a Fed June or July rate hike."
- Standard Chartered Plc (based on Bloomberg)
Pair's Outlook
The US Dollar managed to appreciate against the Japanese Yen yesterday, almost completely negating Monday's losses, with trade closing at the 110.00 mark. As a result, the rising wedge pattern was preserved, but due to the pattern's nature downside risks persist, despite technical indicators giving bullish signals in the daily timeframe. The closest area to limit the losses is located circa 109.70, namely the weekly PP and the wedge's support line. Meanwhile, the 55-day SMA is the level that is preventing the Buck from climbing further above the 110.00 level, also reinforced by the monthly R1. Consequently, a possible rally is unlikely to exceed the 110.50 mark.
Traders' Sentiment
Although not as strong as yesterday, but market sentiment remains bullish at 73%, while the share of buy orders edged up from 52 to 58%.
© Dukascopy Bank SA