Japanese Yen Likely Topped (USDJPY Bottomed) as Sentiment Flips
- EURUSD – Euro Likely Topped as Sentiment Turned
- GBPUSD – British Pound Forecast Unclear
- USDJPY – Yen may have Topped (USDJPY Bottomed)
- USDCHF – Swiss Franc Likely to Trade in Range
- USDCAD – Canadian Dollar Forecast to Break to Highs
- GBPJPY– British Pound Likely Reversed vs JPY
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.
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--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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