USDJPY Reversal in Play As Sentiment Shifts
USDJPY: Retail trader data shows 65.9% of traders are net-long with the ratio of traders long to short at 1.93 to 1. In fact, traders have remained net-long since Dec 29 when USDJPY traded near 113.208; price has moved 2.2% lower since then. The number of traders net-long is 7.5% higher than yesterday and 31.5% higher from last week, while the number of traders net-short is 11.1% lower than yesterday and 18.4% 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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