Weekly Summary of Forex Trader Sentiment and Changes in Positioning
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.