FOREX ANALYSIS: Japanese Yen At Clear Risk of Correction
USDJPY – Forex trading crowds remain net-short the US Dollar (ticker: USDOLLAR) against the Japanese Yen as the pair surges to fresh multi-year highs, giving us further confirmation that the USDJPY set a long-term bottom Yet the real risk of a near-term USDJPY correction warns against buying into continued strength.
The Japanese Yen continues to tumble and the downtrend is clear, but we see real risk of sentiment extremes as FX Futures and Options sentiment is at its most bearish JPY (bullish USDJPY) in years. It’s further interesting to note that search volume for “USDJPY” via Google is at its highest since the pair set a record low in March, 2011. In our opinion this may warn of a popular sentiment extreme.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.