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"Foreign exchange looks to be taking its cues from Shanghai [Composite Index], which is up 2%"
- RBC Capital Markets (based on MarketWatch)
Pair's Outlook
Support at 78.45/43 was unable to stop the pair from sliding lower, allowing it to touch a subsequent level at 78.21/77.99, which in turn has a better chance of negating downward momentum. Given that short-term indicators are largely silent, USD/JPY should remain fluctuating within a corridor formed by 78.43/45 from above and 78.21/77.99 from beneath for now, although it may recover until 78.72/89 is reached.
Traders' Sentiment
The Japanese Yen is currently the least preferred currency among its counterparts, being acquired in 29% of cases involving its crosses. Accordingly, in USD/JPY currency pair the market gives preference to the greenback, having 71% of positions long and merely 29% short.
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