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USDJPY – Retail forex traders continue buying into US Dollar weakness against the Japanese Yen, and a contrarian view of crowd sentiment leaves us focused on further USDJPY declines.
Trade Implications – JPY Pairs: The trading crowd remains near its most long USDJPY since the pair traded near ¥99 through the middle of November. Our contrarian Momentum2 trading strategy has recently sold the pair from ¥103.71, 103.31, 102.24, and most recently 101.25.
Our Senior Technical Strategist nonetheless warns that the pair may soon set a low close to the 100.60 mark, but a USDJPY hold below 101.70 alongside clearly one-sided sentiment leaves our focus to the downside.
Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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