Yen Momentum Likely to Continue
USDJPY: Retail trader data shows 76.5% of traders are net-long with the ratio of traders long to short at 3.26 to 1. In fact, traders have remained net-long since Dec 29 when USDJPY traded near 113.244; price has moved 4.9% lower since then. The number of traders net-long is 20.8% higher than yesterday and 43.3% higher from last week, while the number of traders net-short is 5.8% lower than yesterday and 14.7% 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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