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"Lower expectations for a BOJ easing and smaller JPY short positions suggest limited downside risk for USD/JPY, and we still feel comfortable with maintaining USD/JPY long positions. We maintain our end-June USD/JPY target at 123, recommending keeping a JPY short bias."
- Nomura (based on FX Street)
Pair's Outlook
For a third consecutive day the Greenback pressured the Japanese Yen yesterday. The two closest resistance were pierced, as well as the 121 psychological level. Moreover, the USD/JPY currency pair even reached the third resistance level (weekly R3) at 121.51, which is not far from the March ceiling. Today the weekly R3 acts as an immediate resistance, but is likely to be breached, unless the US fundamentals disappoint. Once the US Dollar takes the December high, we might see it test the March pinnacle at 122.03.
Traders' Sentiment
Bulls keep losing ground, as today 58% of all positions are long (previously 60%). The number of orders to buy the Buck declined by ten percentage points, as they now take up 65% of the market.
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