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"The dollar has come back to ¥109 from ¥105. But it's just back to where it was three weeks ago before expectations for the Bank of Japan's extra stimulus mounted. There is no fresh trading cues to bring the dollar higher toward ¥110."
- Bank of Tokyo-Mitsubishi UFJ (based on Market Watch)
Pair's Outlook
Risk aversion drove the USD/JPY lower on Wednesday, with the pair almost completely erasing Tuesday's gains and the monthly PP limiting the losses. The monthly PP at 108.39 is providing solid support and is expected to cause a rebound, pushing the US Dollar beyond the immediate resistance, represented by the weekly R2 and the 20-day SMA around 109.70. Moreover, the pair has formed a falling wedge pattern, thus, the possibility of a bullish development is higher. The pattern's upper border, however, is the main target, located at 109.77 and bolstered by the weekly R3. Meanwhile, technical indicators are unable to confirm the bullish scenario.
Traders' Sentiment
There are 74% of traders being long the Buck (previously 72%), whereas the portion of buy orders edged down from 56 to 49%.
© Dukascopy Bank SA