FxWirePro: Daily Commodity Tracker - 21st March, 2022 
USD/JPY is likely to be in a false breakout mode, as yesterday’s big uptick failed to garner the necessary momentum in the pair,
- As the USD continues its upward march, pushing its major trading counterparts (EUR, GBP, CHF) lower against the USD, the yen weakened sharply to trade as low as 112.4 per USD, as it cleared key resistance hurdle around 112.2 area.
- However, we have been suspicious of the upside breakout as the retail sentiment indicated otherwise.
Retail sentiment:
- The sentiment reports from IG Markets, which is a UK-based company providing trading in financial derivatives such as contracts for difference and financial spread betting, provides significant insight through its retail positioning data.
- IG markets’ retail positions data provide a glimpse to retail traders’ positions, which are largely used a contrarian indicator since retail positioning moves in the opposite direction to market movements.
- While USD/JPY was moving higher, the retail short positions in USD/JPY was going down sharply, which added bearish bias to the pair.
- Yesterday, we warned readers, that while USD/JPY was moving nowhere, retail short positions have been going down fast since the beginning of the week. From Monday retail short positions declined from 72 percent to 62 percent yesterday.
- Price actions since last night have made it clear that the momentum is not with the bulls as USD/JPY declined from 112.4 to 111.8 as of today, and retail short positions have declined further to just 53 percent. A flip could be ahead, which would reaffirm the false-breakout theory.
