USD/JPY Ratio: 1.01
Signal: Bearish
USDJPY – A notable break in a medium-term USDJPY trend has led to a flip in speculative positioning as the often counter-trend retail community looks to fight the developing trend. With a break in the rising trend from April, the Speculative Sentiment Index jumped to 1.38 from the near-parity reading of 1.01 last week. In fact, the net positive figures from last week are the most extreme since March when the pair marked its major reversal from 12-year lows. The details of the report reflect a retail group that is betting on a return to the bullish trend. From the report’s details, long trades slipped 0.6% in the last 24 hours but surged 43.4% from last week. At the same time, shorts are up 0.7% on the day and only 6.2% lower on the week. The heavy activity on only one side of the market has shown through in open interest. Net positioning grew 18.4% over the week and is 18.1% above the monthly average. As a contrarian indicator, the SSI is suggesting the recent downside break is developing into a potential trend change.
