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"Market sentiment is skewed a bit toward risk on. It's easy for the yen to weaken in such an environment."
- Daiwa Securities Co. (based on Bloomberg)
Pair's Outlook
USD/JPY recovered from the weekly S1 at 116.94, but the bullish momentum appears to be insufficient to push the price through the resistance at 118. There the two-week down-trend line coincides with the monthly pivot point and is thus unlikely to let the rally to extend further. Accordingly, the currency pair is expected to slide down through the nearest supports and reach the demand at 115.54/32, namely the 38.2% Fibo and monthly S1.
Traders' Sentiment
Although not as strong as five days ago, but the SWFX sentiment towards the US Dollar remains bullish, as 59% of open positions are long. At the same time, the percentage of buy orders declined, from 73% observed 24 hours ago to 68%.
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