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USDJPY-Currency Traders Accurately Signal Japanese Yen Gains

Thursday, 18 September 2008 15:06:34 GMT

Written by David Rodriguez, Quantitative Analyst

USD/JPY Ratio: 1.36
Trading Signal: Bearish

Forex Positioning in the US Dollar/Japanese Yen

09-18-09-ssi3

USDJPY – Forex traders continue buying into USDJPY tumbles, and our contrarian SSI indicator forecasts  that further Japanese Yen gains (USDJPY losses) are likely. The ratio of long to short positions in the USDJPY stands at 1.37 as nearly 58% of traders are long. Yesterday, the ratio was at 1.05 as 51% of open positions were long. In detail, long positions are 18.5% higher than yesterday and 77.4% stronger since last week. Short positions are 9.6% lower than yesterday and 5.7% weaker since last week. Open interest is 4.8% stronger than yesterday and 12.2% above its monthly average. When the forex crowd is long and continues buying, the SSI gives us a fairly robust signal to sell the USDJPY.

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