Crowds Buy into US Dollar and Japanese Yen Weakness - Losses Likely

2013-03-07 16:02:00

David Rodriguez, Head of Product

Forex trading crowds have sold into recent US Dollar (ticker: USDOLLAR) weakness against the Euro and Australian Dollar. Our sentiment-based strategies have begun to do the opposite.

View individual currency sections:

EURUSD - Euro Reversal Gains Credibility as Crowds Sell

GBPUSD - Sentiment-Based Strategies Continue Selling GBPUSD

USDJPY - Japanese Yen Tumbles Resume, Further Downside Likely

XAUUSD - Gold Prices May Bounce, But Crowd Sentiment at Extremes

SPX500 - SPX500 Outlook Remains Bullish as Crowds Sell Further

AUDUSD - Australian Dollar May Bounce as Crowds Sell

Weekly Summary of Forex Trader Sentiment and Changes in Positioning

ssi_table_story_body_Picture_12.png, Crowds Buy into US Dollar and Japanese Yen Weakness - Losses Likely

Retail forex speculators have once again sold the US Dollar and Japanese Yen versus the Euro and the Australian Dollar, and our sentiment-based trading strategies have begun going in the opposite direction.

In fact, AUDUSD short interest has grown over 43% since last week as the pair continues to hold key lows. Japanese Yen positions have similarly shifted direction, and a sudden surge in JPY-long positions (USDJPY short) warns that the Yen downtrend may resume.

Our breakout-based and trend-following strategies have stumbled on the sudden JPY and USD correction versus major counterparts, but a more sustained reversal has pushed those same strategies into going long EURUSD, AUDUSD, and USDJPY. Overall market conditions suggests such trades may do well through the coming week of trading.

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