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USDJPY 87.18% of traders long!
Retail positioning in USDJPY continues to make new peaks with every day that passes, an all time peak of 87.18% of retail traders being LONG the pair has been reached today. Its a painful thing to see but as contrarians we maintain a short bias for intraday trading positions.
USDJPY is forming a squeeze formation over the last week or so, which is much like a spring being coiled for a break out. There are 2 fundamentally driven scenarios for this breakout:
1. If global uncertainty remains heightened, Yen buying is likely to continue and we are likely to see a trend following move even lower (more pain for retail traders)
2. A real and lasting agreement is formulated in the Euro zone could result in a break higher and Yen weakening
3. BOJ Intervention could result in strong weakening of the Yen.
As we have seen from past BOJ interventions this is often results in a short term spike and then the usual USDJPY shorting resumes. The underbelly of this flight to the haven of the Yen is the global economic situation, without a cure for the worlds ills the 87.18% of retail traders long this pair will continue to feel the pain.
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So, basically 87% convinced the Japanese will be living in caves, mud huts, and fishing boats, etc. Is Japan energy independent?
I do not think that japan energy is independent but i have to do more researches.
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Japan is one of the most resource-dependent countries of this world (including oil) and this was one of the reasons for their plans for expansion in the 20th.
I'm sure there were people saying that EUR/CHF was a good short just before the SNB bankrupted them.
As a retail investor, unless your account allows you to buy FX options there is no good way of hedging the the risk of the BOJ creating a 1000 pip gap up in the tape.
Is there any way to measure the volume of retail positions as well as the percentage long/short?
I would speculate that there are simply a lot less retail positions in USD/JPY than usual and the small number that there are taking a punt on central bank intervention.
Make that 87.181% long.
I love the way that the FEDs QE Twist and shout was a non-event, and yet the $dollar has still gone to s**t against a bankrupt currency like the EUR...
... just goes to show what a complete and utter piece of crap the $dollar is, very representitive of the country really.
How long did you suit on that zinger, waiting to drop it?