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Is The Japanese Yen About To Rally?

Published 06/16/2014, 09:53 AM
Updated 07/09/2023, 06:31 AM

Chart 1: The yen has been basing for a while now and could be ready to rally!

JPY Daily
 Source: FinViz (edited by Short Side of Long)

We’ve seen close to record high levels of short bets against the Japanese yen in late 2013, together with group-think expectations of more BoJ stimulus to weaken prices even further. However, the currency has not weakened thus far.

On the contrary, the yen seems to be threatening to rally above the 200 MA and break out from a current triangle consolidation. Volatility is extremely low across all asset classes (including currencies such as the yen), so the Japanese currency could be a perfect hedge against any global macro downside risks in coming weeks or months.

Chart 2: We’ve seen close to record high levels of short bets against the yen.

JPY vs COT Yen Positioning
 
Source: Short Side of Long

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