Shift in Sentiment Could Push USDJPY Higher
USDJPY: Retail trader data shows 54.0% of traders are net-long with the ratio of traders long to short at 1.17 to 1. In fact, traders have remained net-long since Dec 29 when USDJPY traded near 113.214; price has moved 0.5% lower since then. The number of traders net-long is 0.7% higher than yesterday and 0.7% higher from last week, while the number of traders net-short is 0.9% higher than yesterday and 9.2% 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. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current USDJPY price trend may soon reverse higher despite the fact traders remain net-long.
--- Written by Dylan Jusino, DailyFX Research
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