As Dollar Weakness Presists, Yen May Rally
USDJPY: Retail trader data shows 69.2% of traders are net-long with the ratio of traders long to short at 2.25 to 1. In fact, traders have remained net-long since Dec 29 when USDJPY traded near 113.303; price has moved 2.5% lower since then. The number of traders net-long is 4.5% higher than yesterday and 0.6% higher from last week, while the number of traders net-short is 6.3% lower than yesterday and 15.1% 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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