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"The direction is clear-- dollar/yen will maintain its rally. But I think it's too early to say that the dollar will test 130 yen soon. The Fed will need to check a wide range of data, such as U.S. retail sales data due Thursday, to confirm the strength of the recovery."
- Chief trader at a Japanese brokerage (based on CNBC)
Pair's Outlook
The US Dollar overperformed on Friday, as it appreciated more than anticipated. The USD/JPY managed to stabilise way above the 125 psychological level and even pierced through the weekly R1. Technical indicators keep giving bullish signs, suggesting the Buck will rise against the Yen for the fourth consecutive time. The closest resistance rests at 126.20, represented by the monthly R1, but trade is more likely to close around 126. Furthermore, the weekly PP at 125.07 should stop the Greenback from falling back under 125.
Traders' Sentiment
Both, net positions and net orders remained unchanged. Still 54% of traders hold long positions, while the share of orders to buy the US currency takes up 65% of the market.
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