Sharp Japanese Yen rallies have been met with similarly aggressive forex crowd selling, giving us contrarian signal to stay short the US Dollar/Japanese Yen as well as the British Pound/Japanese Yen pairs. The number of traders long the US Dollar against the JPY outnumbers those short by a sizeable 5.63 to 1, and such one-sided sentiment often precedes continued moves in the opposite direction. The GBPJPY is similar at 2.02 traders long for every 1 short, and we accordingly remain bearish until further notice. Indecision in US Dollar pairs makes other forecasts more difficult, and we have limited conviction in our short-term USD biases.
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