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Daily FX Retail Trader Contrarian Analysis 13th Oct
This daily report is designed to help traders find opportunities to trade against this group. The premise is very simple we are looking for 66% of retail traders to be trading either long or short a currency pair, we then look for opportunities to fade (trade against) this group. For example if 72.99% of traders are long the USD/CHF we look for opportunities to short that pair.
The pairs that we feel offer the highest opportunity for success are described in the Shortand Long Zones.
What’s New Today? No Major changes to the retail positioning today.
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One of the biggest reasons for JPY strength seems to have disappeared, from WSJ:
TOKYO—China was a net seller of Japanese financial assets including government bonds in August, data from Japan's Ministry of Finance showed Friday.
China sold a net 2.018 trillion yen ($25.59 billion) worth of Japanese financial assets in August, according to the Finance Ministry's current account data. The figure contrasts with the net 583.0 billion yen China purchased in July. Of the total, China sold a net 2.029 trillion yen in money-market instruments, while buying a net 10.3 billion yen in bonds and notes, the ministry said.
The data come amid growing speculation that China, set to displace Japan as the world's second-largest economy this year, has been diversifying its foreign exchange reserves, in part through more purchases of Japanese government bonds. In August, the net holdings of China in Japanese equities remained constant, the MOF's data showed.
So how's it working so far?
Does this mean to, say, sell the USD/JPY right now?
Where is AUD/JPY?