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Japanese Yen Reversal Well Underway

By , Quantitative Strategist
28 February 2013 16:03 GMT
ssi_usd-jpy_body_Picture_11.png, Japanese Yen Reversal Well Underway

USDJPY – Retail forex traders have bought into US Dollar weakness versus the Japanese Yen, and the noteworthy build in positions has led our sentiment-based strategies to sell into USDJPY weakness.

Trade Implications – USDJPY: Our Breakout-based and trend-following strategies continue to buy the Japanese Yen versus the USD, Euro, British Pound, and Australian Dollar (short USDJPY, EURJPY, GBPJPY, AUDJPY). Two weeks ago we wrote of evidence of a popular sentiment extreme: the Wall Street Journal wrote a headline that read “US Funds Score Big by Betting Against Yen.” That marked the top for JPY crosses almost exactly, and we remain bearish until we see real signs of short-term exhaustion.

Written by David Rodriguez, Quantitative Strategist for DailyFX.com

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ssi_usd-jpy_body_1a_2.png, Japanese Yen Reversal Well Underway

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28 February 2013 16:03 GMT