Yen Rally More Convincing as Traders Go Short

USDJPY: Retail trader data shows 73.0% of traders are net-long with the ratio of traders long to short at 2.7 to 1. In fact, traders have remained net-long since Dec 29 when USDJPY traded near 113.267; price has moved 4.0% lower since then. The number of traders net-long is 0.5% lower than yesterday and 11.3% higher from last week, while the number of traders net-short is 0.3% lower than yesterday and 15.5% 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. Positioning is less net-long than yesterday but more net-long from last week. The combination of current sentiment and recent changes gives us a further mixed USDJPY trading bias.

--- Written by Dylan Jusino, DailyFX Research