USDJPY has produced a surprise drop yesterday. Actually, it was not unpredicted. Last month after the BoJ slashed the interest rate to negative I posted a blog to be cautious with JPY shorts. However, the strength of JPY expended further than I would anticipate. Yesterday I tried to call a bottom of the USJPY fall and sustained losses. Again, very dangerous to trade such strong moves. Reversals will evolve very slowly.
The weekly and daily USDJPY charts show that the pair has broken the support and sits at the lower boundary of the downward sloping channel. For the trade strategy I suggest to stay away from USDJPY unless this weeks' range is broken to the upside. Selling USDJPY at this point of time is not a justified risk-reward strategy as well. USDJPY should consolidate until the end of the week and JPY crosses might further fall.
The weekly and daily USDJPY charts show that the pair has broken the support and sits at the lower boundary of the downward sloping channel. For the trade strategy I suggest to stay away from USDJPY unless this weeks' range is broken to the upside. Selling USDJPY at this point of time is not a justified risk-reward strategy as well. USDJPY should consolidate until the end of the week and JPY crosses might further fall.
