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USD/JPY: Ready for a Rally or a False Recovery?

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USD/JPY is at a crucial stage, with the price hovering around 143.900. After a bearish move, the market is attempting to recover, aiming for the resistance zone between 149.000 and 151.000.

COT Insight:

COT data shows a slight increase in long positions among speculative traders (+397), while commercials are increasing their short coverage (+539), indicating caution.

Seasonality:

Historically, May has been a slightly bullish month for USD/JPY (+0.42% over the last 10 years), but the trend has been negative in the last 5 years (-0.57%), indicating uncertainty.

Retail Sentiment:

65% of retail traders are long, which could indicate potential bearish pressure in case of opposite moves, given the risk of position liquidation.

Conclusion:

Carefully monitor the price reaction around 144.000. A breakout towards 149.000 could signal a significant move, but the long retail pressure might represent an obstacle.

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