USD/JPY: Sentiment Suggest That Prices May Continue to Fall
Net-Long Positions Increase 5.7% This Week
USDJPY: Retail trader data shows 59.0% of traders are net-long with the ratio of traders long to short at 1.44 to 1. In fact, traders have remained net-long since Jul 23 when USDJPY traded near 112.444; price has moved 1.9% lower since then. The number of traders net-long is 3.8% higher than yesterday and 5.7% higher from last week, while the number of traders net-short is 2.9% lower than yesterday and 4.0% lower from last week.
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USD/JPY Sentiment Prompts a Strong Bearish Bias
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 Jake Schoenleb, DailyFX Research
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.