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GBPJPY–Heavily one-sided retail FX trader sentiment suggests that the British Pound may continue to rally versus the recently-downtrodden Japanese Yen. Our trader sample shows that 61 percent of open positions are currently short the GBP/JPY; a contrarian view of crowd sentiment gives us a bullish short-term trading bias. And indeed, ‘the crowd’ turned net-short GBP/JPY as it traded above ¥185 through early October.
Until we see a substantive shift in positioning, we’ll continue to favor buying into GBP/JPY gains.
See next currency section: USDCAD - US Dollar Remains in Control versus Canadian Dollar
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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