Receive the Weekly Speculative Sentiment Index report via PDF via David’s e-mail distribution list.
USDJPY –Forex trading crowd remain heavily long the Dollar versus the Japanese Yen as it consolidates near critical levels. The next move may prove decisive as sentiment and price near extremes.
Trade Implications – JPY Pairs: Last week we wrote in favor of getting long USDJPY against the lows as extremely low forex volatility combined with one-sided sentiment to favor a bounce. Yet the Dollar’s failure to bounce significantly off of key lows warns of a potential breakdown. A break below ¥101.35 would likely invite larger declines—in which case we would favor going against the crowd and selling into USDJPY losses.
See next currency section:AUDUSD - Australian Dollar Rally at Risk at these Levels
Written by David Rodriguez, Quantitative Strategist for DailyFX.com
Automate our SSI-based trading strategies via Mirror Trader free of charge
To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up for his distribution list via this link.
Contact David via
Twitter at http://www.twitter.com/DRodriguezFX