‘Fears about [the dollar’s] downside continue to smolder.’ – Mizuho Bank (based on Market Watch)
The USD/JPY currency pair behaved in accordance with expectations yesterday, having bounced back from the 112.60 psychological support level. However, the pair was unable to retain its positions above the weekly S1, with trade closing at 113.26. Today technical indicators suggest the US Dollar is to edge lower, but the 112.60 mark is still expected to remain intact. A breach, however, would only spark more bearish momentum in the medium term, with the 110.00 mark becoming the next main target. Any positive developments are likely to be capped around 114.50, where the weekly and the monthly PPs, as well as the 20 and the 55-day SMAs are located at.
Traders’ sentiment remains bullish at 53%, but the share of purchase orders is slightly lower, namely at 56%, compared to 59% yesterday.