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Japanese Yen Likely Topped (USDJPY Bottomed) as Sentiment Flips

Japanese Yen Likely Topped (USDJPY Bottomed) as Sentiment Flips

David Rodriguez, Head of Product
ssi_table_story_body_Picture_5.png, Japanese Yen Likely Topped (USDJPY Bottomed) as Sentiment Flips

Sharp shifts in forex retail trading crowd sentiment suggests that the US Dollar (ticker: USDOLLAR) may have established a short-term bottom and could continue higher against the Euro and Japanese Yen.

Crowds most recently turned short the Euro against the US Dollar when the EURUSD pair crossed above $1.27, but a more recent reading shows they are quite close to switching direction and becoming net-long. All the while, US Dollar/Japanese Yen positioning is at its least net-long since the pair last traded above ¥80 and we see significant risk that the USDJPY may have bottomed..

We will keep a close eye on the Dow Jones FXCM Dollar Index for any signs of potential reversal. The USDOLLAR’s turn off of recent lows remains encouraging and the Greenback could target further short-term highs.

View an FXCM Expo presentation on the Speculative Sentiment Index for better understanding on how we use it in our trading.

ssi_table_story_body_Picture_6.png, Japanese Yen Likely Topped (USDJPY Bottomed) as Sentiment Flips

How do we interpret the SSI? Watch an FXCM Expo Presentation that explains the SSI.

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

To receive the SSI via e-mail and other reports from author David Rodríguez, e-mail subject line “Distribution List” to drodriguez@dailyfx.com

Contact David via Twitter at http://www.twitter.com/DRodriguezFX

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

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