Japanese Yen Sentiment Warns of Turning Point
USDJPY – Retail forex trader sentiment on the Japanese Yen warns that we may be near an important turning point, as it seems that many small speculators are buying into recent weakness. This stands in stark contrast to the fact that most have sold USDJPY strength—suggesting we may have registered a sentiment extreme.
Trade Implications – USDJPY: Our retail sentiment-based trading strategies have recently bought the Japanese Yen versus the US Dollar, Euro, and British Pound (sold USDJPY, EURJPY, and GBPJPY). Combined with evidence of a popular sentiment extreme, this could be the start of a larger JPY correction.
Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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