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USDJPY –A breakdown in the US Dollar versus the Japanese Yen has been met with aggressive retail crowd buying. A contrarian view of crowd sentiment favors continued weakness.
Trade Implications – JPY Pairs: We see that the USD/JPY exchange rate is “flirting with danger” as it nears critical support, and three of our sentiment-based trading signals have now gone short on the sharp shift in retail positioning. Only a rally above ¥103.35 would negate our bearish USD trading bias versus the Yen.
Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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