FxWirePro: USD/JPY sentiment drops to neutral zone ahead of Fed meeting

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, strongly suggest that traders remain broadly undecided over next move in the JPY against the USD.

IG markets’ retail positions data provide a glimpse to retail traders’ positions, which are largely used a contrarian indicator since retail positioning moves in opposite direction to market movements.

Latest numbers suggest that as of today, 51 percent of the retail positions are on the long side, while 49 percent are short on Japanese yen against the USD, which points to the fact that traders remain broadly undecided over the next move, with the bias being marginally on the upside.

The upcoming Fed rate decision might provide the directional cue. With no press conference scheduled and with no hike expected, traders are likely to focus on the monetary policy statement to assess future rate hikes.

The Japanese yen is currently trading at 109.3 per USD. After a steady weakening from 104.6 per USD, yen bears are struggling around 110 per USD.