Japanese Yen Eyes Fresh Lows - But When?
Japanese Yen – Retail forex trading crowds remain steadily net-long the Japanese Yen (short EURJPY) as it trades near significant lows (EURJPY, USDJPY highs). This serves as contrarian signal that the JPY may remain weak through the foreseeable future.
Trade Implications – EURJPY: We’ve mostly stuck to the sidelines on the Japanese Yen as especially low forex market volatility expectations warned it could stick to tight trading ranges versus the Euro and other major counterparts. That remains the case—the EURJPY and other pairs seem unlikely to break to fresh peaks.
That said, we’re mostly in favor of buying any substantive dips in the EURJPY and USDJPY; joining the crowd in selling seems imprudent given the pronounced Japanese Yen downtrend.
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.