NET-LONG POSITIONS DECREASE FROM LAST WEEK
USDJPY: Retail trader data shows 54.1% of traders are net-long with the ratio of traders long to short at 1.18 to 1. In fact, traders have remained net-long since Dec 18 when USDJPY traded near 113.568; price has moved 3.7% lower since then. The percentage of traders net-long is now its lowest since Jan 10 when USDJPY traded near 108.288. The number of traders net-long is 7.6% lower than yesterday and 6.0% lower from last week, while the number of traders net-short is 1.2% higher than yesterday and 8.4% higher from last week.
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USDJPY DIRECTION IS UNCLEAR
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests USDJPY prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current USDJPY price trend may soon reverse higher despite the fact traders remain net-long.
--- Written by Nancy Pakbaz, CFA, DailyFX Research
