Japanese Yen Sentiment Extreme
Retail FX trading crowds remain their most aggressively net-long the US Dollar (ticker: USDOLLAR) against the Japanese Yen since the USDJPY traded near record-lows in February. Consistent crowd buying underlines the fact that most believe the Japanese Yen is unlikely to challenge fresh highs (USDJPY lows). Indeed, our Senior Technical Strategist believes the USDJPY may indeed bottom. Yet timing the reversal is always exceedingly difficult.
The level of total retail long interest on USDJPY is now at its highest levels since the pair bottomed and crossed above the ¥77 mark. Extreme sentiment can mark major turning points, and we’ll keep a close eye on near-term price action as reversal risk is high.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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