FxWirePro Call Review: Maintain short positions in Dollar against yen

We have been short on USD/JPY for quite some time now. Back in May 2017, in an article named, “FxWirePro: Buy yen at dips targeting 101 per dollar”, available at http://www.econotimes.com/FxWirePro-Buy-yen-at-dips-targeting-101-per-dollar-674020 , we suggested buying yen against the dollar, with a target around 101 per dollar. Here is the recommendation from that article, “We recommend buying the yen at dips against the dollar with a target around 101 per dollar. Proffered buying areas are here at 112 (10 percent of the total intended position), then at 114 (20 percent of the total intended position), then at 115 (60 percent of the total intended position) and finally at 116.5 (10 percent of the total intended position). We would recommend stop loss after entering fully into the trade.”

In a subsequent article, named, “FxWirePro Call Review: Maintain USD/JPY short; stop loss recommended”, available at http://www.econotimes.com/FxWirePro-Call-Review-Maintain-USD-JPY-short-stop-loss-recommended-729744 , we noted,

“The yen weakened to as low as 114.3 per dollar before strengthening again. As per our guideline, our readers couldn’t have entered the entire desired positions.  We recommended at this point maintaining the entered positions and add fresh positions at breakouts. An addition of fresh short positions is recommended one the pair break below 110. As of now, we would like to recommend a bigger stop loss around 115.5 per dollar.”

Since then, the yen strengthened above 110 per dollar, however, it failed to reach the recommended target. USD/JPY declined to as low as 107.5 per dollar in September 2017, only to bounce back to 114.5 area by November. Nevertheless, we doubled down on our short dollar against yen outlook with another recommendation (short-term this time).

In November, in an article named, “FxWirePro: Buy yen targeting 108.5 per dollar” available at http://www.fxwirepro.com/fxwire/popup/newsPopup?id=777971 we recommended going short in USD/JPY at the then current rate of 112 per dollar with a target around 108.5 per dollar and stop loss at 114.8 per dollar.

We would like to urge our readers to maintain the short positions in USD/JPY as the market focus has finally started to focus on Bank of Japan’s (BoJ) policy winding, which should be favorable to our yen outlook. In addition to that, we expect a large-scale sell-off in the stock market which should benefit our USD/JPY outlook.

The accompanying USD/JPY weekly chart shows that USD/JPY is very close to a breakout.