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Japanese Yen Sentiment Warns of Reversal - But When?

Japanese Yen Sentiment Warns of Reversal - But When?

David Rodriguez, Head of Product
ssi_usd-jpy_body_Picture_16.png, Japanese Yen Sentiment Warns of Reversal - But When?

USDJPY – Retail forex traders have bought into recent US Dollar strength versus the Japanese Yen, which admittedly complicates our calls for a potential grind higher in the high-flying USDJPY.

Trade Implications – USDJPY: Recent retail sentiment moves in the USDJPY have caught us off-guard as the trading crowd almost always sells strength and buys weakness. The fact that most traders are long USDJPY as it trades at multi-year peaks complicates our trading biases, and indeed our sentiment-based Momentum2 system most recently got stopped out of a short position. One potential explanation is that retail traders are buying as the trend nears its end. Yet we’d need to see a much clearer price reversal to advocate selling into such impressive strength.

Written by David Rodriguez, Quantitative Strategist for

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ssi_usd-jpy_body_1a_2.png, Japanese Yen Sentiment Warns of Reversal - But When?

View how to automate the high-volatility Breakout2 Trading System via our previous article and webinar recording.

Auto trade the trend reversal-trading Momentum2system via our previous article and webinar recording.

Trade with strong trends via our Momentum1 Trading System and view an archived webinar

Use our counter-trend Range2 Trading system and view an archived webinar guide on automation

New to FX markets? Learn more in our video trading guide.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.