GBP/JPY: 90% of Traders Are ShortGBP/JPYOANDA:GBPJPYEdgeTradingJourneyGBP/JPY reacted strongly after sweeping the liquidity below the previous lows around 211.20–210.80. Since then, the pair has developed a clear bullish impulse, reclaimed the 214.50–216.00 area and started producing a sequence of higher highs and higher lows. COT REPORT ANALYSIS The latest non-commercial positioning reveals an interesting situation. British pound: • 77,343 long contracts • 131,916 short contracts • Net position: approximately −54,573 contracts Japanese yen: • 128,932 long contracts • 181,825 short contracts • Net position: approximately −52,893 contracts Speculators are therefore net short on both currencies. However, the weekly changes provide a more relevant relative signal. GBP long positions increased by 12,075 contracts, while short positions increased by 10,427. As a result, the net GBP position improved slightly. The situation is more negative for the Japanese yen. JPY long positions decreased by 5,256 contracts, while short positions increased by 5,552. This represents a weekly deterioration of approximately 10,808 contracts in the yen’s speculative net position. If confirmed by price action, this could continue to support a bullish GBP/JPY scenario. RETAIL SENTIMENT • 90% of traders are short • Only 10% are long Such a large concentration of short positions can be interpreted as a potential bullish factor from a contrarian perspective. SEASONALITY August has historically been a negative month for GBP/JPY: • 20-year average: approximately −2.83% • 15-year average: approximately −3.20% • 10-year average: approximately −0.97% • 5-year average: approximately −1.44% • 2-year average: approximately +0.88% The longer-term statistics therefore suggest caution. However, some of the more recent seasonal curves indicate a potential recovery during the final part of August. Seasonality does not invalidate the bullish scenario, but it reinforces my decision to avoid an aggressive long entry inside the current resistance zone. MY PREFERRED SCENARIO My preferred scenario starts with a pullback toward 216.00 or, ideally, into the 214.80–215.20 area. Inside one of these zones, I will look for confirmation across the H1 timeframes. This could include a bullish CHOCH or BOS, a valid engulfing candle and an H1 close back above the relevant decision level or POC. If the market provides the required confirmation, my potential upside objectives would be: • TP1: 217.70–218.00 • TP2: 218.50–218.70 • TP3: 219.35–219.50