‘It is unclear whether the situation over North Korea will escalate into military action, but uncertainty is increasing and the dollar continues to edge lower. The dollar also looks shaky technically, after slipping below the 200-day moving average of 108.80 yen.’ – Mizuho Securities (based on Reuters)
Pair’s Outlook
Despite initial sharp downside volatility, the US Dollar managed to end the day in the green zone yesterday, adding 14 pips against the Japanese Yen. The recovery suggests that the channel pattern remains in play, but with the lower bounder now being significantly weaker. A successful rally today could be the first step towards reaching the pattern’s resistance line near 112.00, but technical indicators are unable to confirm this scenario. Downside risks are also present due to the recent breach, but the US fundamental data could provide the required boost for the given pair to stabilise above 109.00.
Traders’ Sentiment
The Buck remains overbought, as 73% of all open positions are long (previously 72%). The number of orders to acquire the Greenback inched up from 57 to 62%.
