‘Until we have answers to some of the big (policy) questions I can’t see any free space for dollar bulls to run into. They are fearful of what the administration is prepared to do to actually keep a lid on the dollar.’ – Neil Mellor, Bank of New York Mellon (based on Reuters)
A technical correction has been registered yesterday, causing the USD/JPY to almost completely erase Monday’s losses. The pair, however, still remains in a bearish trend, where it traded for more than two months now. Further bullish developments could last until the 113.00/50 area is reached, as that is where the exchange rate could retest the bearish trend-line. Nevertheless, technical indicators suggest the US Dollar is to weaken against the Yen today, as they are now giving bearish signals. In this case, the area around 111.50, represented by the Bollinger band and the weekly S1 is likely to provide sufficient support if reached.
Today 65% of all open positions are long, up from 59% on Tuesday. At the same time, the portion of buy orders remained unchanged at 62%.