Retail Traders Reduce Net-Long Positions As Price Ascends
USDJPY: Retail trader data shows 42.9% of traders are net-long with the ratio of traders short to long at 1.33 to 1. In fact, traders have remained net-short since Jun 28 when USDJPY traded near 110.23; price has moved 0.9% higher since then. The number of traders net-long is 5.5% lower than yesterday and 3.0% lower from last week, while the number of traders net-short is 11.9% higher than yesterday and 10.4% higher from last week.
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USD/JPY Sentiment Conveys A Bullish Bias
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USDJPY prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USDJPY-bullish contrarian trading bias.
--- Written by Jake Schoenleb, DailyFX Research