Yen is Clearly Oversold, but we expect further Weakness
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USDJPY –Retail FX traders in our proprietary sample remain net-short the USDJPY since it traded above ¥108 through late October. Until we see a lasting shift we’ll maintain our contrarian calls for USDJPY strength.
Trade Implications – JPY Pairs:Crowd positions in both US Dollar and Japanese Yen exchange rates have moderated since last week as major currencies have mostly consolidated. In the USDJPY this leaves the net retail position at a near-neutral 52 percent short—not a strong trading signal by most measures. And yet until we see a sustained shift towards USDJPY-buying we see little reason to abandon our broader US Dollar-bullish and Japanese Yen-bearish trading biases.
See next currency section:AUDUSD - Australian Dollar Targets Fresh Lows
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.