Japanese Yen at Key Juncture, USD Rebound

USD/JPY Evaluation:

• Since breaking beneath the essential 106.00 degree, USD/JPY has posted a V-shaped near- time period restoration
• The pair trades larger because the US greenback makes an attempt to mount a comeback after almost two weeks of losses within the lead as much as Non-Farm Payroll information later this week.
• IG Consumer Sentiment information reveals that 62% of merchants are internet lengthy, with a sizeable discount in weekly shorts

USD/JPY: Close to-Time period V-Formed Restoration as USD Makes an attempt to Halt Latest Losses

The Japanese Yen, whereas experiencing bouts of sharp advances and declines, has created a collection of decrease highs (down sloping trendline resistance) and had printed a close to time period low of 104.91 final Friday, following a breakdown of the 106.00 degree.

Nevertheless, a resurgence within the international reserve foreign money has seen worth commerce off the latest low and is now testing the important thing 106 degree as soon as extra, this time as resistance.

USD/JPY Day by day Chart: Buying and selling Close to the Key 106.00 Stage

Chart ready by Richard Snow, IG

USD/JPY Technique Going Ahead

The pair is presently poised close to the underside of the earlier buying and selling vary and close to the 50 degree on the RSI – offering little directional data for merchants. Future worth motion confirming both a break above or a failure to carry above 106.00 is more likely to reveal the place the pair could head subsequent.

If the latest bullish transfer continues and leads to a break and shut of 106.00, USD/JPY bears could look to the downward-sloping trendline as this presents potential near-term resistance. A continued transfer above this trendline brings into focus the following space of serious resistance round 107.70 – 108.00 (yellow bar).

USD/JPY bears nonetheless, could start to eye the 104.50 degree (yellow line) ought to worth fail to interrupt and shut above 106.00. Additional draw back momentum could convey the latest low of 104.19 into play.

USDJPY Day by day Chart: Key Buying and selling Ranges

Chart ready by Richard Snow, IG

USD/JPY Sentiment Knowledge Reveals Contrarian Outlook

• On the time of writing, USD/JPY retail dealer information reveals 62.04% of merchants are net-long with the ratio of merchants lengthy to brief at 1.63 to 1.
• When working with a contrarian view with respect to IG Consumer Sentiment, the actual fact merchants are net-long suggests USD/JPY costs could proceed to fall.

• The variety of merchants net-long is 6.74% larger than yesterday and 6.89% larger from final week, whereas the variety of merchants net-short is 4.95% larger than yesterday and 13.98% decrease from final week.
• Positioning is much less net-long than yesterday however extra net-long from final week. The mix of present sentiment and up to date modifications offers us an additional USD/JPY bearish contrarian buying and selling bias.

— Written by Richard Snow for DailyFX.com

Contact and observe Richard on Twitter: @RichardSnowFX