‘It is too early to expect a sustained recovery even though on the converse, the odds for a break below 110.00 have diminished considerably.’ – UOB (based on FXStreet)
The US Dollar successfully outperformed the Yen on Thursday, receiving a boost from a better-than-expected US GDP reading. As a result, the given pair breached two immediate resistances, encountering resistance only in front of the 112.00 level. After such a relatively strong rally a bearish correction is expected. The weekly PP, which is now the nearest support, is unlikely to limit the losses if bears do push the Buck lower. Technical indicators are in favour of the negative outcome, but we should not rule out the possibility of another rally, with fundamental data providing the Greenback with more impetus.
Today 71% of traders are long the Buck (previously 72%), while 60% of all pending orders are to acquire the US Dollar, up from 50% yesterday.