News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Further your forex knowledge and gain insights from our expert analysts on AUD with our free guide, available today: https://www.dailyfx.com/free-trading-guides?ref-author=social#forecastschoices=AUD?QPID=30472&CHID=9 https://t.co/LHJi7CNFmM
  • $EURUSD https://t.co/KZyXX6p2oI
  • The ISM manufacturing index plays an important role in forex trading, with ISM data influencing currency prices globally. Find out about the recent history of ISM data, how to track it, and how to trade its release here: https://t.co/MZtBh8pYG3 https://t.co/1zNf5dpDjU
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here: https://t.co/vg7w10la3j https://t.co/z8z6BNudn5
  • #PELOSI SAYS WE ARE GOING TO PASS THE INFRASTRUCTURE BILL THIS WEEK PELOSI SAYS SHE WILL NEVER BRING TO THE HOUSE FLOOR A BILL THAT DOESN'T HAVE THE VOTES TO PASS $USD $SPX $XAUUSD
  • Short-term uncertainties to keep the pressure on equity markets. Get your weekly equities forecast from @JMcQueenFX here: https://t.co/JLMDPZKvN8 https://t.co/YbdJnwoqj1
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/hqW38VawJl
  • - Unreal atmosphere - Shame about the result, but no complaints - Usyk masterclass - Heavyweight division blown wide open https://t.co/BKCLJTDk9h
  • The USD could still rally a bit from here, but has resistance not far ahead that it will need to overcome if it is to extend to a larger degree. Get your weekly $USD technical forecast from @PaulRobinsonFX here: https://t.co/n0CVWWOJDe https://t.co/0uLjsQ2gwM
  • When it comes to buying and selling forex, traders have unique styles and approaches. Learn about buying and selling forex here: https://t.co/D8DXSAdpqC https://t.co/nfiFAlyYXv
USD/JPY Violently Reverses from YTD Low with Biggest Gain in 8-Months

USD/JPY Violently Reverses from YTD Low with Biggest Gain in 8-Months

Tyler Yell, CMT, Currency Strategist

Key Takeaways:

  • USD/JPY technical strategy: pierce of 12-month trendline brought out the buyers
  • USD/JPY traded to 107.32 on Friday, as high as 109.40 on Monday
  • CFTC data showed hedge funds continued to hold JPY short position
  • IGCS Highlight: Drop in net-long exposure favors contrarian via of upside

Hedge funds are likely patting themselves on the back, for now. Data from the CFTC showed they added to short JPY positions last week, which, if held, definitely played out well on Monday. Multiple risk-off scenarios that were feared last week going into the weekend failed to play out. As a result, the JPY sold off, and USD/JPY rose by the most in 8 months as the US Dollar rebounded.

The real action in JPY shorts may be seen in CAD/JPY or GBP/JPY, which traded to the highest level since November 2015 and 1-month highs respectively. USD/JPY pushed above 109, but recently traded on Friday to the lowest level of 2017 at 107.32. Validating the push higher in JPY was the SPX closing at a record high.

The technical picture seems to favor a continued bounce as a failed breakout, meaning the move to new 2017 lows did not hold or extend could lead to the aggressive unloading of long JPY positions. One theme that has plagued 2017 is that a plethora of potential risk-off scenarios have failed to stick to the wall, which happens in Bull Markets for stocks like we’re currently witnessing.

Adding to the Intermarket view that USD/JPY could see a continued bounce after failing to extend lower below 108 is the sentiment picture. IGCS is showing a decline of net-longs, and an increase of short exposure. As a contrarian indicator, a failure to hold an extreme level followed by retail traders adding exposure in the direction of the failed breakout if further evidence to favor a rebound.

While an across the board USD rally is not favored, it’s worth keeping an eye on weak currencies like the JPY that could benefit tactical USD longs. On Monday, we also saw a rebound in expectations for a December hike by the Fed. While still below 50%, which is considered priced in, it’s fair to say that a push higher in odds would align with USD strength, especially against weaker currencies like JPY.

Daily USD/JPY Chart: Strong rejection after piercing the trend line as risk-off sentiment fails to stick

USD/JPY Violently Reverses from YTD Low with Biggest Gain in 8-Months

Chart Created by Tyler Yell, CMT

USD/JPY Insight from IG Client Positioning: Drop in net-long exposure favors reversal higher

The sentiment highlight section is designed to help you see how DailyFX utilizes the insights derived from IG Client Sentiment, and how client positioning can lead to trade ideas. If you have any questions on this indicator, you are welcome to reach out to the author of this article with questions at tyell@dailyfx.com.

USD/JPY Violently Reverses from YTD Low with Biggest Gain in 8-Months

USDJPY: Retail trader data shows 66.2% of traders are net-long with the ratio of traders long to short at 1.96 to 1. In fact, traders have remained net-long since Jul 18 when USDJPY traded near 114.057; the price has moved 4.2% lower since then. The number of traders net-long is 5.5% lower than yesterday and 5.2% higher from last week, while the number of traders net-short is 14.5% higher than yesterday and 4.4% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USDJPY prices may continue to fall. Positioning is less net-long than yesterday but more net-long from last week. The combination of current sentiment and recent changes gives us a further mixed USDJPY trading bias (emphasis added.)

---

Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

To receive Tyler's analysis directly via email, please SIGN UP HERE

Contact and discuss markets with Tyler on Twitter: @ForexYell

Access Our Free Market/ Trading Guides Here:

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES