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"The approach to 125 yen takes dollar/yen into politically sensitive territory. Any big gains by the dollar just as the Trans-Pacific Partnership (TPP) talks are climaxing could stimulate those on both sides of the Pacific opposed to the negotiations, and the authorities would not want that."
- IG Securities (based on CNBC)
Pair's Outlook
On Monday, the USD/JPY currency pair edged slightly higher, adding 16 pips in total. Today's technical studies keep giving mixed signals, while the US Dollar is still expected to maintain the gains. Although the nearest resistance cluster around 124.85 is likely to limit the rally, the Greenback will doubtfully inch that far; thus, 124.60 should be the ceiling for today. In the medium term, namely by week's end, the American Dollar is to test the 125.00 major level if it receives a strong enough boost.
Traders' Sentiment
Bulls retreated once again, but their share refused to drop below the 70% mark. At the same time, the number of commands to buy the US Dollar dropped two percentage points to 55%.
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