Traders should be aware that being long USD/JPY in October seems to have a built-in advantage: it has risen in 13 of the past 19 Octobers.
Speculative accounts remain short of USD/JPY; although they have reduced their positions somewhat, enough remain to provide the fuel needed to cause a bigger short squeeze.
IMM data for the week ending Sept.
24 showed a futures market short an equivalent cash USD/JPY position of $1.5 billion, down from the biggest short of 2019 registered in late August of $4.0 billion.
USD/JPY remains elevated after the Bank of Japan's tankan showed business confidence in the third quarter slid to its lowest in six years nT9N25105Y.
Spot saw new fiscal-half-year demand from Japanese companies, as well as foreign demand.
Scope grows for much bigger gains through the 108.43 Fibonacci level, a 50% retrace of the 112.40 to 104.46 (April to August) drop, which in turn will unmask 109.37, 61.8% of the same 112.40-104.46 decline.
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