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USD/JPY Analysis: To Preserve The Channel Pattern

‘The dollar fell 0.3 percent against the yen to 112.19, pulling away from a seven-week high of 113.045 yen set on Thursday.’ – Masayuki Kitano (Based on Reuters)

Pair’s Outlook

Strong US fundamentals helped the USD/JPY pair to completely recover from its intraday low on Friday and even edge 29 pips higher, retesting the descending channel’s resistance line. Today the pair opened with a small bullish gap, but those gains are not expected to hold, with the channel’s upper boundary still prevailing. The Greenback should now keep declining against the Yen until the 108.00 mark is reached. However, first the Buck is required to pierce the 55-day SMA, where demand could be sufficient and trigger another rally, eventually leading to the end of the channel pattern.

Traders’ Sentiment

Today 61% of traders are short the US Dollar, compared to 58% on Friday. Meanwhile, 52% of all pending orders are to sell the Buck (previously 58%).

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This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.

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