Japanese Yen – The Japanese Yen may be setting up for a big reversal as the US Dollar broadly looks to bounce, and indeed we remain in favor of broader USD strength.
Trade Implications – USDJPY: Forex trading crowds were recently at their most long USDJPY since the pair set a major low through September, 2012, and the recent shift in price and positions suggests we may be at a similarly significant turning point.
We might have a “tradable low” in place as our sentiment-based Momentum2 strategy has now gone long from ¥98.64, and there’s likewise evidence of a short-term bullish base in the USDJPY. The next move is pivotal, and a break above major resistance at 99.20 and 100 would help confirm a larger turnaround.
Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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