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GBPJPY – The majority of retail FX trader positions in our sample remain short the British Pound versus the fast-falling Japanese Yen, and as such we will maintain a contrarian bullish bias in the GBPJPY and JPY crosses.
Trade Implications – GBPJPY:Our data shows that the majority of positions turned short GBPJPY as it traded above ¥174 through late October and with very minor exceptions have remained short since. It isn’t often that such a flip in positioning precedes a 1000+ point move and markets are clearly stretched. Yet sentiment and price extremes are only clear in hindsight; we will continue to call for GBPJPY and xxx/JPY strength.
See next currency section:EURUSD - Euro Looks Likely to Test $1.26 versus the US Dollar
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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