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"You had no firm resolution coming from G7 with respect to the potential for intervention from the Bank of Japan, which makes people a little bit more comfortable in being long yen, and you had a marketplace that was frankly over-short yen."
- TJM Brokerage (based on Business Recorder)
Pair's Outlook
The risk-off sentiment drove the USD/JPY currency pair lower on Monday, having put the rising wedge's support line to the test. As a result, the pair opened below that trend-line, but a positive development today is to preserve the pattern. The weekly PP is now the closest resistance, located at 109.76, but a surge towards the 55-day SMA is also possible, which kept the pair at bay through most of the previous week. Technical indicators are bolstering the probability of the positive outcome, as they are now giving bullish signals.
Traders' Sentiment
There are still 74% of all open positions being long today, unchanged since yesterday. At the same time, the portion of orders to purchase the US Dollar lost six percentage points. The orders now take up 52% of the market.
© Dukascopy Bank SA