Retail Sentiment Is Hinting At Further Weakness In USDJPYThe ratio of long to short positions in the USDJPY stands at 2.22 as 69% of traders are long according to a survey of retail traders at several brokers. Yesterday the ratio was 2.21; 69% of open positions were long. Long positions are 4.3% higher than yesterday and 5.8% above levels seen last week.
We use these statistics as a contrarian indicator to price action, and the fact that the majority of traders are long gives a signal that the USDJPY may continue lower. The trading crowd has grown further net-long from yesterday and last week. The combination of current sentiment and recent changes gives a further bearish trading bias.
We will look to Short USDJPY with a break of the 20 Day Low of 110.960, we suggest looking for a break of this low by at least 5 Pips. Look for targets of 109.700 & 108.000. Stops should be set using 1x or 2x ATR of 125 Pips.
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