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"Our stance is that the BOJ and the government are comfortable with where the yen is. Unless there's a significant deflationary shock in the form of a very strong currency or a significant decline in equities, their inclination is to hold [the QE]."
- HSBC (based on CNBC)
Pair's Outlook
Even though the USD/JPY currency pair's exchange rate barely changed on Friday, despite weak US fundamental data, a 34-pip drop occurred over the weekend. The Greenback appears to be determined to recover from a full week of losses, with the nearest resistance located only at 122.87, namely the weekly PP. The monthly R1 and weekly S1 are forming a demand area around 122.10, which with the bullish technical indicators are increasing the US Dollar's chances of closing near the Friday's opening price.
Traders' Sentiment
The share of short positions remains rather high at 74% (75% on Friday), whereas the portion of orders to acquire the US currency declined from 74 to 54%.
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