One-sided Sentiment Points to Dollar Weakness, Yen Strength
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USDJPY –A recent shift towards retail FX crowd buying acts as contrarian signal that the USDJPY may continue lower.
The ratio of long to short positions in the USDJPY stands at 1.87 as 65% of traders are long. Yesterday the ratio was 1.92; 66% of open positions were long. Long positions are 2.1% lower than yesterday and 20.2% above levels seen last week. Short positions are 0.3% higher than yesterday and 13.6% below levels seen last week. Open interest is 1.3% lower than yesterday and 3.2% below its monthly average. We use our SSI as a contrarian indicator to price action, and the fact that the majority of traders are long gives signal that the USDJPY may continue lower.
See next currency section:AUDUSD - Australian Dollar Forecast Unclear
Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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