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"Specifically in regards to weakening the JPY we believe that the BoJ lacks real tools to effectively weaken the JPY for extended period of time. Ineffective direct FX intervention will only further damage the central banks reputation."
- Swissquote Bank (based on WBP Online)
Pair's Outlook
The US Dollar was unable to maintain trade above the 109.00 major level on Friday, ultimately retreating and closing with a 15-pip loss. The same resistance is likely to keep the USD/JPY pair from advancing today as well, namely the monthly S2 at 108.70, whereas the Bollinger band around 108.08 is providing immediate resistance. However, the chance of the nearest resistance getting pierced is relatively high, as the Greenback is support by a fresh 18-month low of 107.63. A breach of this level could trigger a sell-off, leading the exchange rate towards the monthly S3 and the weekly S1 at 106.60. Meanwhile, technical indicators are unable to confirm either scenario.
Traders' Sentiment
Today 72% of traders hold long positions (previously 74%), while the portion of sell orders edged higher from 49 to 54%.
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