USD/JPY, EUR/JPY at Risk Amid Rising Net-Long Bets


Japanese Yen, USD/JPY, EUR/JPY, Technical Analysis, Retail Trader Positioning – Talking PointsRetail traders are betting on a continued decline in the YenThis could precede a turn lower in USD/JPY and EUR/JPY Check out my webinar recording to learn more about IGCSAccording to IG Client Sentiment (IGCS), retail investors are seemingly increasing their long exposure in Japanese Yen crosses like USD/JPY and EUR/JPY. IGCS is typically a contrarian indicator. This could signal more room for these pairs to fall ahead. For further analysis into the Yen and IGCS, where I discussed how you can use the tool in your own trading strategy, check out the recording of this week’s webinar above.USD/JPY Sentiment Outlook – BearishThe IGCS gauge implies that about 56% of retail traders are net-long USD/JPY. Upside exposure increased by 5.22% and 13.19% over a daily and weekly basis respectively. The fact traders are net-long hints prices may continue falling. The combination of current sentiment and recent changes further supports that the pair may weaken ahead.Technical AnalysisUSD/JPY is attempting to find follow-through in the aftermath of a Bearish Engulfing candlestick pattern. This could spell a turning point for the pair. But, rising support from the beginning of this year is still maintaining the dominant upside bias. A breakout under it could open the door to testing the 100-day Simple Moving Average (SMA). The latter may reinstate the focus to the upside. USD/JPY Daily ChartChart Created in Trading ViewEUR/JPY Sentiment Outlook – BearishThe IGCS gauge implies that about 46% of retail investors are net-long EUR/JPY. Upside exposure increased by 17.67% and 28.62% over a daily and weekly basis respectively. The fact traders are net-short hints prices may keep rising. But, the combination of current sentiment and recent changes warns that the pair may turn lower ahead.Technical AnalysisEUR/JPY is attempting to find follow-through after a Hanging Man candlestick pattern emerged. While prices have declined slightly since then, the 20-day SMA is maintaining the dominant focus to the upside. As such, a close under the line could see the pair aim lower towards rising support from last year. In that outcome, the trendline may reinvigorate bulls as it acts as key support.EUR/JPY Daily ChartChart Created in Trading View*IG Client Sentiment Charts and Positioning Data Used from June 9th Report— Written by Daniel Dubrovsky, Strategist for DailyFX.comTo contact Daniel, use the comments section below or @ddubrovskyFX on Twitter
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