Japanese Yen Lining up for Big Reversal - but When?
Trade Implications – USDJPY: Crowds are now their most net-long USDJPY since it traded near record-lows through late 2013, and a purely contrarian view of crowd sentiment favors continued Dollar weakness/Yen strength. Yet as we note with the Euro/US Dollar, “the crowd” is often right at the turns.
Does this mean we join the crowd and buy into USDJPY plummets? No—sentiment extremes are only clear in hindsight. Yet we’d watch the USDJPY reaction if and when it tests major support near ¥95—the next move might be pivotal.
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.