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USD/JPY free fall curbed by Japanese retail investors

USDJPY Daily Chart

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One of the reasons the dollar has pulled out of its tailspin against the yen has been a surge in buying from Japanese retail investors. So-called Mrs Watanabe traders have been buying the dollar on dips in part because of higher interest rates in the U.S., said Takuya Kanda, general manager at Gaitame.Com Research Institute Ltd. in Tokyo. Still, some appear to be selling around 107 yen because of the risk U.S. President Donald Trump will provide another surprise that may weaken the greenback, he said.

Dip Buyers

Technically speaking, the price went below the bottom of the range, currently testing its former support - ongoing resistance at levels around 107.05. This level coincides with the 50-period (which makes it even stronger). If the price stays below these levels - the decline is expected to continue.

Alternative scenario: If the price rises above the 50-period and resistance, after a successful test we can look for long positions with the target 200-period around 110.60

Source: Bloomberg Pro Terminal


 Trader Aleksandar Kumanov

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