PRICE MOVED 0.9% HIGHER SINCE MARCH 31
USDJPY: Retail trader data shows 48.9% of traders are net-long with the ratio of traders short to long at 1.05 to 1. In fact, traders have remained net-short since Mar 31 when USDJPY traded near 110.5; price has moved 0.9% higher since then. The number of traders net-long is 3.7% higher than yesterday and 9.2% lower from last week, while the number of traders net-short is 7.7% lower than yesterday and 14.7% lower from last week.
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USDJPY: RECENT CHANGES SUGGESTS THAT THE PRICE TREND MAY SOON REVERSE
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests USDJPY prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current USDJPY price trend may soon reverse lower despite the fact traders remain net-short.
--- Written by Nancy Pakbaz, CFA, DailyFX Research
Follow Nancy on Twitter @NancyPakbazFX