US Dollar Shows Signs of Life versus Yen
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USDJPY– Retail FX traders have recently sold aggressively into US Dollar strength versus the Japanese Yen, and yet the same positioning data shows traders remain net-long the USD/JPY. The mixed signals give us a similarly unclear view on the future of Yen price action; it is difficult to advocate for buying into USD/JPY strength when most traders are long.
The “smart money” in large speculators remained heavily net-short USD/JPY into last week, and our longer-term bearish bias remains mostly intact. Of course, if the facts change we must change: a more sustained shift towards retail FX USD/JPY selling would quite likely lead us to call for a larger trend turnaround.
See next currency section:XAUUSD - Gold Prices Suddenly Suggest it’s Time to Sell
Written by David Rodriguez, Senior Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.