Japanese Yen Remains at Risk After the Fed, Retail Traders Unwind USD/JPY Bullish Bets

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Japanese Yen, USD/JPY, Technical Analysis, Retail Trader Positioning – IGCS Update

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The Japanese Yen weakened in opposition to the US Dollar within the aftermath of the Federal Reserve rate of interest determination, the place Chair Jerome Powell alluded to a ‘higher for longer’ financial coverage method. In response, retail merchants have change into much less bullish about USD/JPY. This may be seen by having a look at IG Client Sentiment (IGCS), which usually capabilities as a contrarian indicator.

USD/JPY Sentiment Outlook – Bullish

The IGCS gauge reveals that about 38% of retail merchants are net-long USD/JPY. Since most of them are biased to the draw back, this hints that costs might proceed greater down the street. This is as upside publicity decreased by -5% and -17% in comparison with yesterday and final week, respectively. With that in thoughts, the mix of total positioning and up to date adjustments presents a stronger bullish bias.

of shoppers are web lengthy.

of shoppers are web quick.

Change in Longs Shorts OI
Daily -2% -3% -2%
Weekly -12% 4% 0%

Japanese Yen Daily Chart

Looking on the day by day chart, USD/JPY is flirting with trying a break above the 61.8% Fibonacci extension stage at 148.27. That mentioned, detrimental RSI divergence is current. This reveals that upside momentum is fading, which may at occasions precede a flip decrease. That would place the give attention to the 20-day Moving Average, which is fast help.

That mentioned, the broader bullish bias is being maintained by rising help from March. As such, it could take an prolonged transfer decrease to overturn the bullish bias. Clearing greater exposes final yr’s excessive of 151.94.

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How to Trade USD/JPY

Japanese Yen Daily Chart

Chart Created in Trading View

— Written by Daniel Dubrovsky, Senior Strategist for DailyFX.com

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