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USDJPY –Retail FX traders continue to hold USD-long positions against the Japanese Yen, and this would normally act as contrarian signal that USD/JPY could decline. Yet the crowd has remained mostly net-long as the USD/JPY traded above ¥120 at the end of 2014. In short: our normal contrarian view of crowd sentiment doesn’t seem to apply to the Japanese Yen.
Total retail volume highlights ¥123.50 as a major support level as overall momentum favors continued Yen weakness (USDJPY gains).
See next currency section:AUDUSD – Australian Dollar Forecast Firmly in Favor of Weakness
Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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