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USDJPY –Aggressive crowd buying serves as steady contrarian signal that the US Dollar may continue onto fresh lows versus the Japanese Yen.
Trade Implications – JPY Pairs: Recent USDJPY gains admittedly caught us by surprise, but it’s worth noting that the price reversal has not produced a comparable shift in retail FX positions. Indeed, crowd sentiment alongside two other key factors warn against chasing the US Dollar higher here versus the Yen.
Our technical trading bias remains in favor of USDJPY weakness until we see the exchange rate close above important congestion near ¥103.
See next currency section:EURJPY - Euro Forecast Bullish versus the Japanese Yen
Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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