‘Should the yen be bought, if the Korean situation is so nearby? But buying the yen seems to be the established market reaction, and if you’ve been around long enough, you know you don’t go against the market.’ – State Street Bank and Trust (based on Reuters)
Pair’s Outlook
The USD/JPY currency pair remained relatively unchanged on Friday, retaining its position above the 109.00 mark. However, on Sunday the French election first round’s results allowed the risk-on mood to prevail and boosted the US Treasury yields, causing the pair to open with a strong bullish gap today. Despite this gap, a technical correction is likely to take place, with investors taking profit of the recent rally. Technical indicators also suggest the Greenback is to weaken against the Yen today, but price is expected to close above the 110.00 threshold, despite strong downside volatility. The election surge ultimately was a good sign for the USD/JPY, as it preserved the channel pattern.
Traders’ Sentiment
There are 69% of traders holding long positions today (previously 72%), whereas only 58% of all pending orders are to acquire the US Dollar.
