USD/JPY: Extreme Positioning Warns of a Pullback
USD/JPY has managed to print a sequence of nine rising weekly candles, with a tenth one still possible. We remain wary of further near-term gains, despite a longer-term upside bias. This view is driven by the extreme short Yen positioning now in place. As mentioned in yesterday's report we have longer term targets in the 109.00 - 110.00 region, but anticipate a pullback ahead of any such long-term move higher.
The move above the key resistance at 103.74 also favours a continuation of the longer term bullish trend. Another resistance can be found at 105.50 (61.8% retracement of the decline that started in June 2007). A key support now lies at 99.57 (19/11/2013 low, see also the 200 day moving average).