Japanese Yen, USD/JPY, AUD/JPY, Technical Analysis, Retail Trader Positioning – Sentiment Weekly
- Retail merchants have bought the Japanese Yen regardless of latest power
- As a contrarian sign, this may bode in poor health for USD/JPY, AUD/JPY
- Fundamental analysis is supplied within the webinar recording above
The Japanese Yen has been making a comeback over the previous couple of weeks following a protracted interval of weak spot this yr. Retail merchants have been noticing. Looking at IG Client Sentiment (IGCS), lengthy publicity has been rising in USD/JPY and AUD/JPY. IGCS tends to operate as a contrarian indicator. If this development in positioning continues, maybe the Yen may need extra room to get well. However, do the basics align with this state of affairs? For detailed protection, try the webinar recording above.
USD/JPY Sentiment Outlook – Bearish
The IGCS gauge reveals that about 44% of retail merchants are net-long USD/JPY. Since most merchants are nonetheless biased decrease, this hints costs could proceed rising. However, upside publicity has climbed by 9.99% and 22.38% in comparison with yesterday and final week respectively. With that in thoughts, latest modifications in publicity trace that latest losses in USD/JPY might prolong within the classes forward.
Daily Chart
USD/JPY has confirmed a breakout below the rising trendline from March, opening the door to extending losses. However, costs had been unable to clear the 130.83 – 131.34 inflection zone. This is as the 100-day Simple Moving Average (SMA) held as assist. In the occasion of additional upside positive factors, this might spell a resumption of the broader uptrend. Otherwise, clearing assist would seemingly open the door to proceed the descent from late June in direction of May lows.
AUD/JPY Sentiment Outlook – Bearish
The IGCS gauge reveals that about 38% of retail merchants are net-long AUD/JPY. The majority of them stay biased to the draw back. This suggests costs could proceed rising. However, draw back publicity has decreased by 17.79% and 31.25% in comparison with yesterday and final week respectively. With that in thoughts, latest modifications in sentiment are hinting that AUD/JPY could prolong latest losses.
Daily Chart
AUD/JPY has damaged below the trendline from February, however additional draw back affirmation has been considerably missing. A bigger decrease wick was created on Tuesday, reflecting consumers coming in as losses had been trimmed. This has left behind a variety of assist between 90.52 and 91.42. Clearing this zone would open the door to extending losses in direction of the May low. Otherwise, a bounce would place the main target again on the trendline, which might maintain as new resistance.
*IG Client Sentiment Charts and Positioning Data Used from August 2nd Report
— Written by Daniel Dubrovsky, Strategist for DailyFX.com
To contact Daniel, use the feedback part under or @ddubrovskyFX on Twitter