Japanese Yen Likely to Hit Fresh Peaks versus Euro, GBP
Japanese Yen – A substantial shift towards Japanese Yen selling (EURJPY buying) suggests that Yen crosses may have set substantial tops through recent price action (EURJPY, GBPJPY, AUDJPY may trade lower).
Trade Implications – EURJPY: Retail forex trading crowds were recently at their most net-short EURJPY since the pair set a substantial top near ¥123, but there’s been a substantial shift in the past week—long orders have surged 54 percent while short positions are down 27 percent.
The performance in our sentiment-based trading strategies in JPY pairs has admittedly been underwhelming as of late, but our Momentum2 strategy has now gone short EURJPY from ¥130.01. We think the trade has strong potential for success.
Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.