‘And unfortunately for yen bulls, the weaker yen hasn’t led to a pickup in Japanese exports. Until this happens, the yen will likely continue to weaken.’ – Marc Chandler, BBH (based on Market Watch)
Pair’s Outlook
Despite strong second class US fundamentals yesterday, the Greenback failed to outperform the Yen, due to a drop in yields and stocks. Consequently, the exchange rate fell back under the 114.00 major level, while also putting the second support level, namely the weekly R1, to the test. Downside risks persist today as well, with key inflation data eyed. Disappointment could lead to another significant drop, with the main target being the 113.00 handle, where the 100-day SMA and the monthly R1 rest. On the other hand, technical indicators imply the USD/JPY pair is to edge higher again, in which case the 114.40 mark is still likely to limit the possible gains.
Traders’ Sentiment
Traders’ sentiment remains bearish at 65%, whereas 55% of all pending orders are to purchase the Buck (previously 51%).
