3 Dec 2013
Demand at Tokyo fix sends USD/JPY to retest 103.10
FXstreet.com (Bali) - USD/JPY is flying higher in Tokyo after very solid demand came through at 00.50GMT Tokyo fix, sending the pair from 102.83 session lows to retest 103.12 trend highs.
Despite the clear uptrend in place, recent futures market positioning has confirmed spec accounts extended fresh Yen shorts to a fresh 6-year low, which means any setback on the Yen crosses may potentially lead to sharp falls should specs decide to bail-out from the trade in mass on short squeeze snowball effects. For now though, there are no indications of that happening.
As Jim Langlands, Founder at FXCharts, notes: "Bear in mind that this trade is now very one sided and that the 4 hour charts are overbought and still showing some bearish divergence. While there is really only one way to play this trade from in the medium term, I still remain wary of a sharp correction and would therefore raise stops on existing long positions to an appropriate level."
Despite the clear uptrend in place, recent futures market positioning has confirmed spec accounts extended fresh Yen shorts to a fresh 6-year low, which means any setback on the Yen crosses may potentially lead to sharp falls should specs decide to bail-out from the trade in mass on short squeeze snowball effects. For now though, there are no indications of that happening.
As Jim Langlands, Founder at FXCharts, notes: "Bear in mind that this trade is now very one sided and that the 4 hour charts are overbought and still showing some bearish divergence. While there is really only one way to play this trade from in the medium term, I still remain wary of a sharp correction and would therefore raise stops on existing long positions to an appropriate level."