USDJPY – Trading crowds remain heavily net-long the US Dollar (ticker: USDOLLAR) against the Japanese Yen as the USDJPY falls noticeably off of significant highs. We would normally take this as contrarian signal that the pair may continue lower, but the crowd has more recently built short positions and closed long positions.
As with other US Dollar pairs, the USDJPY looks as though it may continue to consolidate in the absence of a major breakout or breakdown in the Dow Jones FXCM Dollar Index. We remain modestly bullish USDJPY if the USDOLLAR continues to hold key support at 9900. The extremely yield-sensitive USDJPY may likewise trade off of any significant moves in US Treasury Yields.
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
