Crowds Buy into US Dollar and Japanese Yen Weakness - Losses Likely

DailyFX

Forex trading crowds have sold into recent US Dollar (ticker: USDOLLAR) weakness against the Euro and Australian Dollar. Our sentiment-based strategies have begun to do the opposite.

View individual currency sections:

EURUSD - Euro Reversal Gains Credibility as Crowds Sell

GBPUSD - Sentiment-Based Strategies Continue Selling GBPUSD

USDJPY - Japanese Yen Tumbles Resume, Further Downside Likely

XAUUSD - Gold Prices May Bounce, But Crowd Sentiment at Extremes

USDCHF - SPX500 Outlook Remains Bullish as Crowds Sell Further

AUDUSD - Australian Dollar May Bounce as Crowds Sell

Weekly Summary of Forex Trader Sentiment and Changes in Positioning

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ssi_table_story_body_Picture_12.png, Crowds Buy into US Dollar and Japanese Yen Weakness - Losses Likely

Retail forex speculators have once again sold the US Dollar and Japanese Yen versus the Euro and the Australian Dollar, and our sentiment-based trading strategies have begun going in the opposite direction.

In fact, AUDUSD short interest has grown over 43% since last week as the pair continues to hold key lows. Japanese Yen positions have similarly shifted direction, and a sudden surge in JPY-long positions (USDJPY short) warns that the Yen downtrend may resume.

Our breakout-based and trend-following strategies have stumbled on the sudden JPY and USD correction versus major counterparts, but a more sustained reversal has pushed those same strategies into going long EURUSD, AUDUSD, and USDJPY. Overall market conditions suggests such trades may do well through the coming week of trading.

Download eight years’ worth of SSI data via this link.

ssi_table_story_body_1a.png, Crowds Buy into US Dollar and Japanese Yen Weakness - Losses Likely

View how to automate the high-volatility Breakout2 Trading System via our previous article and webinar recording.

Auto trade the trend reversal-trading Momentum2system via our previous article and webinar recording.

Trade with strong trends via our Momentum1 Trading System and view an archived webinar

Use our counter-trend Range2 Trading system and view an archived webinar guide on automation

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ssi_table_story_body_Picture_13.png, Crowds Buy into US Dollar and Japanese Yen Weakness - Losses Likely

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

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