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USDJPY – Retail FX traders remain heavily long the US Dollar versus the Japanese Yen, and a contrarian view of crowd sentiment leaves us calling for further weakness.
Trade Implications – JPY Pairs: Our trader sample shows that open USDJPY long positions outnumber those short by 1.7 to 1. Last week that ratio was briefly above 2:1 and as such it’s worth noting that sentiment has moderated. Yet positions remain one-sided, and until this changes we will maintain our contrarian view in favor of a USDJPY breakdown.
See next currency section: AUDUSD - Australian Dollar Likely Set Important Low
Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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