by Mike Ber, Forex Alerts
Somethings gotta give soon on the Yen chart as we are at extreme levels for both commercials and non-commercials on the (COT) commitment of traders chart below. Non commercials are approaching their lowest levels and with the USDJPY nearing it's previous highs we're expecting this to put in some sort of double topping pattern. If there is a situation where the price can break above last spring's highs on convincing volume and stay above then it has a chance at continuing higher. We just don't see that happening and the more likely scenario is it breaks above intraday, reverses, and then begins a multi-month long correction to key support levels to be identified at a later time.
Chart courtesy of Spreadcharts
- Commercial Traders: These traders represent companies/institutions who use the futures market to offset risk.
- Non-Commercial Traders: This category includes large institutional investors, hedge funds and other entities that are trading in the futures market for investment and growth. Pay the most attention to this category.
- Non-Reporting Traders: This is the catch-all category for traders too small to be required to report their positions to the CFTC. They are notoriously bad traders and you will more often see this category betting against the trend.