- Barclays (based on Reuters)
As it turned out, a failure of the pair to reach the upper bound of the recently formed pattern on Tuesday led to a breach of support at 110 yen, where the up-trend line is joined by the 55-day SMA and weekly PP. The near-term outlook is therefore strongly negative, while Dollar's longer-term intentions are likely to be defined by its reaction to a test of 107 yen, where the monthly S1 coincides with the 38.2% Fibonacci retracement level of the 2012-2015 rally.
In the meantime, traders took advantage of a cheaper Dollar and increased the amount of long trades to 74% of the total amount in the market. As for the pending orders placed 100 pips from the spot price, 56% of them are buy and 44% are sell commands.