USD/JPY Ratio: -1.61
Signal: Bullish
| Currency | Last Week | Present* | % Long | % Change in Positions Outstanding | Signal |
| USDJPY | -1.03 | -1.61 | 38% | 5.43% | Bullish |
USDJPY – The bearish bias in USDJPY speculative positioning has increased over this past week as the pair tests the upper boundary of a month-long range. However, the market may be heading for a breakout this time around as momentum in underlying spot builds and the SSI reading drops to its most extreme level in nearly a year. In fact, the ratio’s -1.61 reading, with nearly 62% of traders short, reflects the most bearish sentiment among the speculative retail group since June 21st, 2007. Looking into the details, traders are attempting to trade the range as positioning has shifted considerably yet open interest changed little. Long trades dropped 12.1% from yesterday and were 11.6% weaker than the same period a week ago. A lot of this lost interest went directly to the opposite side of the market as shorts rose 8.5% from Wednesday and 20.2% over the week. And, during all this activity, net positioning slipped only 3.1% through the week and was 7.3% below the monthly average. Considering the relative extreme of the USDJPY’s SSI, the contrarian indicator is pointing to a breakout to the upside and an extended rebound from March’s swing low.
