Yen May Rally on Bullish Trading Bias
USDJPY: Retail trader data shows 61.8% of traders are net-long with the ratio of traders long to short at 1.62 to 1. In fact, traders have remained net-long since Nov 15 when USDJPY traded near 113.413; price has moved 1.9% lower since then. The number of traders net-long is 4.9% higher than yesterday and 17.1% higher from last week, while the number of traders net-short is 10.2% lower than yesterday and 9.4% 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.
--- Written by Dylan Jusino, DailyFX Research
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