‘After a massive buildup in long positions earlier this week, currencies are in full reversal mode, with the dollar falling aggressively.’ – Cambridge Global Payments (based on Reuters)
Pair’s Outlook
Even though the Fed raised rates on Wednesday, both inflation and labour market showed improvements, the US Dollar still plummeted on a cautious Fed stance. Against the Yen a nearly 140-pip loss was registered, but from the technical perspective this was anticipated. The decline only confirmed the ascending channel pattern’s resistance line, allowing the pair to cover most of the distance towards retesting the lower boundary. The monthly PP and the 100-day SMA is now the only obstacle on the Buck’s path, which is expected to be crossed today. However, a drop under 113.00 is doubtful just yet, but is required for the up-trend to be reconfirmed this week.
Traders’ Sentiment
Now 58% of traders are long the US Dollar (previously 53%), but 55% of all pending orders are to sell it, compared to 48% on Wednesday.
