USDJPY Forecast to test ¥97 as Japanese Yen Breaks Highs
Japanese Yen – Three weeks ago I wrote plainly in favor of a JPY bounce (USDJPY decline) as sentiment seemed exceedingly one-sided. Indeed, a USDJPY-short position remains one of my favorite trades for the same reasons.
Trade Implications – USDJPY: Retail forex traders are now their most aggressively net-long the USDJPY since the pair traded below ¥80 in November, and our contrarian sentiment-based trading strategies have gone aggressively in the opposite direction.
Our Breakout2 system recently went short from ¥99.67, and I like the position as long as we stay below critical resistance at ¥100.50. The fact we’ve now broken key reaction lows at ¥98.60 leaves subsequent targets at May lows near ¥97.00.
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.