‘By and large, the yen does tend to appreciate when the situation across markets is one of high volatility, but there has been a squeeze in the yen, which accounts for this anomalous behavior in the sense the yen has outperformed as volatility has been quite benign.’ – Societe Generale (based on Market Watch)
Pair’s Outlook
The USD/JPY currency pair surprised with its performance on Monday, as it erased all intraday gains and trade closed in the red zone. However, the pair managed to retain its position above the weekly pivot point, but technical indicators keep implying the Buck is to post more losses against the Yen today. Nevertheless, the 110.50 level is expected to be the lowest closing point, even though volatility is likely to stretch even lower. In case the psychological 110.50 mark fails to limit the losses, the weekly S1 at 110.28 is expected to succeed.
Traders’ Sentiment
Although not as strong as yesterday, market sentiment remains bullish, now at 65% (previously 70%). Meanwhile, the portion of orders to acquire the US Dollar lost three percentage points over the day, having fallen to 57%.
