I remain short the Japanese Yen, but the risk of real correction suggests that adding to the position or opening fresh longs will have to wait.
I think there's plenty reason to watch for more Japanese Yen weakness, but sentiment is so incredibly one-sided at the moment that I think a correction is quite likely.
Not one to go against my longer-term bias, I won't close my existing long and instead trail my stop to previous critical resistance at 84.15. If we see the USDJPY show signs of basing once more, I will look for a fresh long position.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up to David’s e-mail distribution list via this link.
Contact David via Twitter at http://www.twitter.com/DRodriguezFX
Facebook at http://www.Facebook.com/DRodriguezFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.