USDJPY has been on a down trend as money flows out of the Greenback against the majors over the past few weeks. The Greenback has bounced back this week, but is this another opportunity to jump in the downtrend?
Technically, the pair is retracing higher in a downtrend, giving me an opportunity to short at a better price. Stochastics are indicating that the pair is overbought and I have used the Fibonacci tool to find possible points of resistance to enter.
Fundamentally, the major themes weighing down on the Greenback include speculation of US credit rating downgrade, huge deficit, and quantitative easing policies. Also, US housing data may continue to weigh down on the US Dollar as today's S&P/Case-Shiller continued to show a fall in housing prices. Tomorrow's US housing data may continue to look weak and bring a round of risk aversion....we'll just have to wait and see.
For today, here's how I'd like to play USDJPY on my short bias views:
Short USDJPY at 95.60, stop at 96.20, pt1 at 95.00, pt2 at 94.40
Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.
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