USD/JPY Ratio: 1.57 Signal: Bearish
USDJPY – The Japanese yen has been one of the most active currencies in the FX market over the past six months with the winds of risk whipping up, but speculators interest in staking out a major reversal may be fading. In the past two weeks, USDJPY’s SSI reading has cooled from 2.46 to 2.08 and then to 1.57 today. However, though the index is closing in on parity, open interest has held up. Net positioning is 10.6% above its monthly average even after falling 6.9% from yesterday. In detail, long positions are 16.5% lower than yesterday and 13.9% weaker than a week ago. Shorts jumped 13.7% from yesterday and are 2.3% stronger than last Thursday. Since the SSI is a contrarian indicator, the index points to further USDJPY losses; but like EURUSD, the approach of parity may foreshadow a flip.