As Dollar Weakness Presists, Yen May Rally

Dollar Weakness are still continue:

The dollar continue to be out favour across the board. On Thursday there were several data points that were of interest to traders and the mixed nature of these reports did little to encourage buyers of the dollar. The trade deficit widened more than expected and jobless claims also increased slightly more than analyst had forecast.

On the plus side the Chicago business barometer increased sharply to a level of 67.6 smashing forecast of 62. This is a regional view of the national economy. This is go highest reading since March 2011, but investors continued to sell the dollar as concerns over passing of the tax bill dominated investor sentiment.

Today there is no high impacting US economic data due, so dollar movements could remain muted moving towards the weekend.

 

USDJPY: Retail trader data shows 69.2% of traders are net-long with the ratio of traders long to short at 2.25 to 1. in fact, trader have remained net- long since Dec29 when USDJPY trader near 113.303; price has moved 2.5% lower since then. The number of traders net-long is 4.5% higher than yesterday and lower than yesterday and 15.1% lower from last week.

we typically take a contrarian view to crowd sentient, and the fact traders are net-long suggests USDJPY price may continue to fall. Traders are further net-long than Yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger USDJPY- bearish contrarian trading bias.

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 --- Written by Dylan Jusino, DailyFX Research

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