USD/JPY Rally Hits Pause, Positioning Warns of Mixed Trading
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USDJPY: Retail trader data shows 54.5% of traders are net-long with the ratio of traders long to short at 1.2 to 1. In fact, traders have remained net-long since Jul 18 when USDJPY traded near 113.901; price has moved 1.5% lower since then. The number of traders net-long is 2.0% higher than yesterday and 10.2% lower from last week, while the number of traders net-short is 2.0% lower than yesterday and 2.7% higher 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. Positioning is more net-long than yesterday but less net-long from last week. The combination of current sentiment and recent changes gives us a further mixed USDJPY trading bias.
--- Written by Christopher Vecchio, CFA, Senior Currency Strategist
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