Japanese Yen Sentiment Shows Signs of Capitulation, Reversal Increasingly Likely
Noteworthy forex market volatility has produced similarly sharp moves in currency trading crowd sentiment, clouding short-term outlook for the resurgent US Dollar and Japanese Yen. Last week we claimed that a sharp shift towards US Dollar selling gave contrarian signal to go long the downtrodden USD. Yet extreme choppiness in the past 7 days makes it difficult to make short-term forecasts with any sort of conviction. Hints of capitulation in Forex Options and Futures markets warn that the Greenback may have set an important bottom against the Euro, Australian Dollar, British Pound, and Canadian Dollar through recent trade. Caution is nonetheless advised as volatility expectations have jumped substantially through recent moves.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.