The Yen is re-establishing its negative correlation with risky assets and remains one of the top 3 currency choices in times of risk aversion. The Dollar was the number one safe-haven currency in March due to liquidity issues known as dash for cash, but since then, USDJPY declined notably after the Fed killed the USD in late March.

 

The 107.00 support already held twice since USDJPY stabilized and the price is now about to make a third attempt.

 

The shallower bullish price action suggests a bearish break of 107.00 is more probable than it being a base for a stronger move higher. In turn, such a breakout below 107.00 will open the way for a further push lower toward 105.00 as there is very little support on the way down to 105.00.

 

The recent stabilization of the price action allows us to pick opportunities that are actually tradable. This is a simple trade setup that will be triggered on a clear bearish breakout of 107.00. The obvious area to target lower is 105.00, although depending on the specific circumstances, USDJPY can move further lower.

 

Entry:

Stop loss:

• Place the stop above the breakout point.
• USDJPY shouldn't move above 108.00 for trade to remain valid.

Targets:

 

 

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Thank you!