Key Factors Favor a Much Larger USDJPY Breakout
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USDJPY – Retail FX traders have bought aggressively into the recent USDJPY pullback, and a contrarian view of crowd sentiment suggests the pair will remain below key range highs near ¥103.
Trade Implications – JPY Pairs: Last week we noted that a sharp shift towards crowd selling pointed to a Dollar break above ¥103, but recent price action clearly shows the pair has had difficulty holding gains. Given the more recent moves in the USDJPY and trader sentiment, we see little reason to expect that the pair will break substantially above resistance or below support. The spike-low at ¥101.80 represents an important price floor.
See next currency section:AUDUSD - Australian Dollar Outlook Remains Bearish
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.