US Dollar Likely to Fall Further versus Japanese Yen

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USDJPY: Retail trader data shows 72.2% of traders are net-long with the ratio of traders long to short at 2.6 to 1. In fact, traders have remained net-long since Jan 09 when USDJPY traded near 117.082; price has moved 5.2% lower since then. The number of traders net-long is 10.5% lower than yesterday and 0.7% lower from last week, while the number of traders net-short is 11.8% lower than yesterday and 1.2% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USDJPY prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USDJPY-bearish contrarian trading bias.