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USD/JPY Strategy: Down Move Stalls But Bias Remains Bearish

USD/JPY Strategy: Down Move Stalls But Bias Remains Bearish

Ilya Spivak, Head Strategist, APAC

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Talking Points:

  • Trading Strategy: Short USD/JPY at 113.07
  • US Dollar selloff pauses to digest but overall positioning hints at further weakness
  • Partial profit booked on short trade from near 113.00, scale-up opportunities eyed

The US Dollar has paused to digest losses after hitting the lowest level in two months against the Japanese Yen but overall positioning hints further weakness is ahead. Prices broke neckline support set from September, seemingly ending the rally from that month’s swing low and changing the near-term trend bias.

From here, a daily close below the 50% Fibonacci retracement at 111.03 opens the door for a challenge of the 61.8% level at 110.15. Alternatively, a move back above the 111.90-112.04 area (38.2% Fib, support-turned-resistance) paves the way for a retest of the 113.00 figure.

The short USD/JPY position activated at 113.07 hit its initial objective and partial profit has been booked. Remaining exposure is in play to capture any follow-on weakness. The stop-loss has been trailed to the breakeven level. Opportunities to scale up the trade will be evaluated as they present themselves.

Just getting started trading USD/JPY? Check out our beginners’ guide!

USD/JPY Strategy: Down Move Stalls But Bias Remains Bearish

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