USDJPY Monthly Trading Strategy: Bullish or Bearish?

USDJPY Technical Strategy

USDJPY has posted moderate gains following the Bank of Japan (BOJ) aggressive monetary policies to weaken the yen in the Forex market.  Despite talks of further easing by the BOJ, Dollar-yen monthly chart portrays a bearish picture for the pair. We are perfectly aware of recent comments made by BOJ regarding further stimulus but the chart provides us with a fairly decent entry to execute a short trade.

We believe Greece or an outside market event such as a geopolitical tension is likely to take its toll on USDJPY and perhaps other JPY pairs and crosses in the Forex market. As the yen is know for possessing safe-haven qualities it is rather difficult to entertain which scenario will cause USDJPY to tumble in the market.

USDJPY Monthly Chart

Please click on the chart to enlarge:

USDJPY Trading Strategy, 12 Feb, 2015

USDJPY Monthly Chart, 12/02/15

The bearish engulfing is warning the market bulls of the forthcoming retracement. The corrective gains may provide an improved an entry as the required stop loss order is substantially reduced. We are rather surprised many investment firms are suggesting further gains will be seen in the pair, which appears to contradict the monthly chart. The protective stop loss must be layered above 121.92. If we will attempt to exercise a tighter stop loss we will place ourselves in a moderate risk of being stopped out before the reversal takes places. Please note this is a monthly chart, which will often incur in a hefty stop but countered with a decent Risk-Ratio (RR).

USDJPY Trade Alert Details

USDJPY short @ market price
Take profit: 109.65
Protective stop:  123.67
RR: 1 : 2.5 (approx.)

Update will be posted at the bottom of this page and an instant notification will be emailed to you when such updates are made.

*please note USDJPY was trading at 119.72 as we wrote the analysis and shed over +30 pips, which caused us to update the monthly chart.

12/02/15 UPDATE: USDJPY is trading at 118.65 at the time of this writing. We are closing 15% of the short trade at market price.

12/02/15 UPDATE II: USDJPY is trading at 188.69 at the time of this writing.  We are closing 10% of the trade at market price.

16/02/15 UPDATE: USDJPY is trading at 118.33 at the time of this writing. We are closing 15% of the short trade at market price and shift the protective stop to entry.

24/02/15 UPDATE: USDJPY triggered our protective stop loss order at the entry despite our hopes for a deeper risk aversion mode. We have nevertheless were able to realize a decent profit form the short trade.