Japanese Yen Outlook May Shift versus US Dollar
USDJPY –Forex trading crowds remain aggressively long the US Dollar (ticker: USDOLLAR) against the Japanese Yen, but a significant shift in sentiment moderates our forecasts for further USDJPY declines. Total retail long interest on the USDJPY is now at its lowest since the pair traded near ¥81 in late April.
Our technical forecast for the Japanese Yen points to a test of important congestion support at ¥79, and the pair’s subsequent moves will depend on whether the pair can hold key levels. Forex correlations nonetheless emphasize that the US Dollar/Japanese Yen’s direction will almost certainly depend on moves in US Treasury Yields.
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--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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