Japanese Yen Remains a Clear Sell until this Changes
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USDJPY –The US Dollar continues to surge versus the Japanese Yen, and our retail FX trader data shows that crowds continue selling. Until that changes we see little choice but to favor continued USDJPY strength.
Trade Implications – JPY Pairs:Total retail short interest in the USDJPY recently hit its highest levels on our records, and the Dollar’s move above ¥120 once again shows traders are just short of a fresh extreme. There’s little question that the risk of a significant reversal is high—the USDJPY has rallied an almost-unbelievable 13 percent in the past 35 trading days alone.
Price and sentiment extremes are nonetheless only clear in hindsight, however; we will continue to call for USDJPY strength absent a larger shift.
See next currency section:AUDUSD - Australian Dollar Forecast to Depreciate Further
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.