Noteworthy gains in the Japanese Yen have been met with aggressive forex crowd selling, giving contrarian signal to go long the Yen against the US Dollar, British Pound, and other key counterparts. Similar US Dollar selling against the Euro (EURUSD buying) likewise suggests that the Euro could continue lower. The critical question rolling forward is whether pairs such as the EURUSD can hold their medium-term ranges. Our Speculative Sentiment Index works best in trending markets as it tends to produce price-following trades, and there is clear risk that price action can slow and produce SSI strategy losses. It will be critical to watch whether the Japanese Yen can break significant highs and whether the Euro will break substantial lows against the US Dollar.
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