Long USD/JPY at Market
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We’ve been discussing the macro setup behind this trade for a little over a week now. After the most recent Bank of Japan meeting underwhelmed expectations for an increase in stimulus, the Yen strengthened considerably to run towards longer-term resistance values. This has showed prominently in USD/JPY as price action is remaining supported above the widely-watched psychological level at ¥100.00.
The next Bank of Japan meeting is in September, but the long-side of this trade could see interest ahead of that meeting should expectations begin to rise (again) around another increase in Japanese stimulus.
Stops on the position can be set at ¥99.42 in order to get below the July swing-low and the ¥100-level in order to take on approximately ~160 pips of risk; and profit targets could be directed towards Fibonacci levels at ¥103.10 (1.3x risk), ¥105.35 (2.7x risk) and then ¥106.64 (3.5x risk).
Created with Marketscope/Trading Station II; prepared by James Stanley
--- Written by James Stanley, Analyst for DailyFX.com
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