Yen May Reverse Rally Despite Traders’ Net Short Positions
USDJPY: Retail trader data shows 48.9% of traders are net-long with the ratio of traders short to long at 1.04 to 1. The number of traders net-long is 7.2% lower than yesterday and 11.3% lower from last week, while the number of traders net-short is 8.0% lower than yesterday and 13.4% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USDJPY prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current USDJPY price trend may soon reverse lower despite the fact traders remain net-short.
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