Forex Traders Signal that US Dollar/Japanese Yen Could Recover

Forex Positioning in the US Dollar/Japanese Yen Pair

USDJPY – Positioning in the US Dollar/Japanese Yen pair shows that the forex trading crowd has stopped buying into USD/JPY declines—the first sign that the Japanese Yen could slow its recently impressive ascent. Indeed, we most often see that the majority of traders try to fade the ongoing trend, but long positions in the US Dollar/Japanese yen have actually fallen 28.1 percent since last week. When traders are net long but buying has dropped considerably, we have often seen a period of consolidation or even short-term reversals in trend. This suggests that the USD/JPY may range trade or bounce through near-term trading, but a drop in open interest makes it difficult to make forecasts with strong conviction through the near term. Monitor our SSI-based USD/JPY trading strategies on DailyFX+.