Three out of four traders short USD/JPY

Forex sentiment update

Now above 146.00, USD/JPY is trading through 2023 highs. 75% of traders expect the pair to fall back toward its long-term mean, yet the dollar has traded over 400 pips higher against the yen before.

USD/JPY historical prices

Australian dollar is also at a year-to-date extreme against US dollar. AUD/USD has not been below 0.6500 since November 2022 and sentiment is 83% long.

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How client sentiment works

Client Sentiment shows the percentage of IG client accounts with open positions that are currently long or short. If the majority of client accounts with open positions are long a given market, then they expect the price to rise; if the majority is short, then they expect it to fall. (Values taken using IG's Client Sentiment measure as of the previous day's close.)

Trend followers might go with sentiment, while contrarians would tend to go against the trend. For example, a 65% long measure in EUR/USD could reflect a buying opportunity for trend followers or a selling opportunity for contrarians.

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EUR/USD sentiment - 57% long

Last week's sentiment: 53% long

Long sentiment grows in EUR/USD this week after sliding from 1.1000 last week to under 1.0900 today. While the pair spent several months this year under the current price, traders are anticipating a move back toward more recent July highs.

GBP/USD sentiment - 52% long

Last week's sentiment: 55% long

British pound sentiment remains slightly long while trading around 1.2740. GBP/USD dipped below 1.2700 at the start of the week before rallying back.

USD/JPY sentiment - 75% short

Last week's sentiment: 69% short

USD/JPY has gained over 200 pips from last Wednesday - trading near 146.00. Only a quarter of traders believe the pair can go higher toward historic extremes.

USD/CHF sentiment - 81% long

Last week's sentiment: 79% long

Swiss franc sentiment is back above 80% nearing 0.8800; prior to July, USD/CHF spent no time under 0.8830 in 2023.

AUD/USD sentiment - 83% long

Last week's sentiment: 80% long

Already through 2023 lows, AUD/USD long sentiment grows to over 80%. More than four out of five traders expect the pair to rise from its current price around 0.6440.

USD/CAD sentiment - 63% short

Last week's sentiment: 58% short

US dollar continues to rise against Canadian dollar, and short sentiment grows as well. USD/CAD is its highest since June 1st, yet still far from 2023 highs.

How to trade client sentiment

1. Open an account to get started, or practice on a demo account

2. Choose your forex trading platform

3. Open, monitor, and close positions on forex pairs

Trading forex markets using client sentiment requires an account with a forex provider like IG. Many traders watch major forex pairs like EUR/USD and USD/JPY for potential opportunities based on client sentiment. Contrarians might go against the prevailing sentiment in a forex pair, while trend followers might go with it.

You can help develop your forex trading strategies using resources like IG’s Trading Academy. Once your strategy is developed, you can follow the above steps to opening an account and getting started trading forex.

Your profit or loss is calculated according to your full position size. Leverage will magnify both your profits and losses. It’s important to manage your risks carefully as losses can exceed your deposit. Ensure you understand the risks and benefits associated with trading leveraged products before you start trading with them. Trade using money you’re comfortable losing.