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USDJPY – The retail FX trading crowd remains heavily long the US Dollar versus the Japanese Yen, and the tight trading range in the USDJPY suggests it is coiling up for its next move higher.
Trade Implications – JPY Pairs: Crowds continue buying the Dollar across the board and the USDJPY is no exception. Normally we would this as a contrarian sign that the pair could continue lower. Yet the potential for a broader sentiment extreme is clear, and our technical forecast likewise remains bullish as long as the Greenback holds key support at ¥101.35.
Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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