© Dukascopy Bank
"Markets are in the process of reassessing the odds of more easing, which is going to continue to put a downward bias on equities, and remain supportive of the dollar"
- Morgan Stanley (based on WSJ)Bullish momentum of USD/JPY has not yet weakened and the pair still gravitates to 81.49/63. Afterwards the price is likely to set its goal at 83.80. Dips should be contained by supports at 80.42, 80.00 and 79.55 as well.
Traders' sentiment
USD/JPY currency pair is overbought to a large extent, since 77% of all the positions opened are long. Consequently, shorts constitute 23% of the market.
Long position opened
The break of the short-term resistance line 80.83 would pave the way for the pair to rise up to 81.19. The clearance of the second daily resistance level would establish a new target for traders at 81.60.
Short position opened
Major dealers are planning to partially close their short positions if the pair touches upon the first support level at 80.06. However, if the bearish impetus proves to be strong enough, some of the positions could be squared off at S2 of 79.65 and at S3 of 79.29.
© Dukascopy Bank