‘With this [expectations of the newly-elected South Korean President to negotiate with North Korea] in the background, as well as the present uncertainty in the U.S., the dollar will trade heavily today below the 114-yen level.’ – Daiwa Securities (based on Reuters)
Pair’s outlook
The US Dollar outperformed the Japanese Yen for another day yesterday, adding more than 70 pips, but still unable to close above the 114.00 mark. Technical studies keep suggesting the Buck is to post more gains, but the immediate resistance area around 114.15, formed by the weekly and the monthly R2s, could prevent the USD/JPY pair from edging higher today. As a result, risks are skewed to the downside, with the weekly R1 at 113.47 being the nearest possible support. On the other hand, a boost from fundamental and political factors could provide the Greenback with sufficient bullish momentum to climb over the immediate resistance and approach the 115.00 mark.
Traders’ sentiment
There are now 65% of traders holding short positions (previously 63%), whereas 54% of all pending orders are to sell the US Dollar.
