The USDJPY currency pair has recently retained its clear bullish momentum. The technical setup suggests an approaching climax of the uptrend, a move that typically targets and squeezes out the remaining speculators. Fundamentally, this surge was driven by a more hawkish stance of the Federal Reserve (Fed) than expected. The US central bank is likely to take a pause in its cutting-rate cycle. Yesterday’s minutes from the regulator’s previous meeting confirmed this view, pushing the greenback to new peaks.
Meanwhile, the yen is still under pressure due to the Bank of Japan’s (BoJ) ultra-loose policy and massive economic stimulus announced by the new government. Expectations for forex interventions get weaker, sending the national currency even deeper down.
At the same time, the macro picture remains unchanged. On higher timeframes, USDJPY is primarily impacted by the monetary policy divergence between the Fed and the BoJ. The primary forecast for the next 3–6 months points to a decline in the pair.
The ultimate recommendation is to sell USDJPY. Lock in profits at the level of 155.50. Place Stop Loss at 159.50.
Calculate your open position so that a potential loss (protected by a Stop Loss order) is limited to 1% of your deposit. If your account balance does not allow entering a position of this size, it is better to skip the trade and wait for other market signals that meet low-risk criteria.
This content is for informational purposes only and is not intended to be investing advice.
