Japanese Yen Sentiment Flat, Turnaround Risk Grows
USDJPY – Retail forex traders remain long the US Dollar (ticker: USDOLLAR) versus the Japanese Yen, and relative stability in positioning suggests the USDJPY will continue to stall and perhaps turn lower.
Trade Implications – USDJPY: Our retail sentiment-based trading strategies have bought the Japanese Yen versus the US Dollar, Euro, British Pound, and Australian Dollar (sold USDJPY, EURJPY, GBPJPY, AUDJPY) on the risk of reversal. 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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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.