Yen Likely Set Huge Top (USDJPY Bottom) on FOMC Meltdown
Japanese Yen – Last week I highlighted extremely one-sided retail USDJPY positioning as a key reason for a bounce. Call it luck if you will, but the more recent shift helps confirm an important Yen turnaround.
Trade Implications – USDJPY: Since last week, USDJPY long positions are down an important 19 percent while short interest is up 16 percent. There are still nearly 2.5 retail FX traders long USDJPY for every one short, and I won’t ignore that. But a substantial shift towards Dollar strength shouldn’t likely be ignored, and the USDJPY is in a good position to rally further.
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.