Danger Grows of Larger Correction in USDJPY
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Trade Implications – JPY Pairs: Our data shows the majority of traders have remained short USDJPY since it traded above ¥103 through mid-August; this has served as consistent signal to buy into strength. Yet an important gain in USDJPY-long positions warns that the trade may have become altogether too popular.
A US Dollar move below ¥108 opens up a larger correction towards ¥105.50, while a break above ¥108.75 would be necessary to re-instill our previously-bullish trading bias.
See next currency section:AUDUSD - Australian Dollar No Longer a Clear Sell versus Greenback
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.