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USDJPY – The US Dollar continues to trade near major highs versus the Japanese Yen, and extremely one-sided sentiment leaves us firmly in favor of buying into gains.
Trade Implications – JPY Pairs: The majority of retail traders in our sample turned short the USDJPY as it traded above ¥103. Until we see a shift towards crowd buying, our algorithms will continue to buy into Dollar strength.
There are early warnings that the USDJPY may correct lower before its next break higher, but such a pullback would likely present an attractive opportunity to buy in anticipation of further strength.
See next currency section:AUDUSD – Australian Dollar Likely to Depreciate until this Changes
Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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