This Might be the USDJPY Bottom - Why?
I’m looking at FX optionstraders panic as the USDJPY erases its post-Bank of Japan Quantitative Easing rally. And clearly that’s cause for concern, but I think it’s also clear that this might be the sort of capitulation that allows the USDJPY to resume its uptrend.
I’m further seeing retail forex traders hit their most net-long USDJPY since the pair broke above ¥80. It’s always dangerous to try and get too comfortable in calling for reversals week in and week out, but this might be the short-term sentiment extreme that allows the USDJPY to resume its larger uptrend.
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.