© Dukascopy Bank SA
"There is safe-haven buying in the markets. Investors don't want to buy the U.S. dollar because of worries about QE3, so that's why the yen is the safe-haven currency of choice"
- Bank of New Zealand (based on Bloomberg)
Pair's Outlook
USD/JPY is slowly drifting lower and should bump into 78.04/77.98 if the U.S. Dollar continues to depreciate. Additional supports are at 77.79/63 and 77.39, below which the pair is unlikely to wander for now. On the contrary, it is likely to gain bullish momentum and challenge an interim resistance level at 78.44 and a formidable area at 78.64/79 afterwards.
Traders' Sentiment
Regardless of the fact that the pair has been in a decline for the last three days, the ratio between bulls and bears is the same—74% to 26%, respectively, meaning the market is probably anticipating a reversal. Likewise, distribution among orders support bullish outlook, being that 67% of them are to buy the Dollar and 33% are to sell it.
© Dukascopy Bank SA