Japanese Yen forex positioning continues to forecast USDJPY declines, as retail forex speculators continue buying into the JPY pairs’ impressive tumbles.
Our FXCM Speculative Sentiment Index is a contrarian indicator, as we historically see that the “crowd” is most often incorrect in its forecasts for direction across the majority of forex pairs. Indeed, our SSI indicator signaled that the forex trading crowd became net-long the USDJPY when it traded near 109—accurately forecasting that the pair would decline through subsequent trading.