USDJPY dropped vigorously from the highs of 118.608 levels to the current 115.970 levels, the flurry of bearish streaks occurred especially after Whipsaws in the uptrend that indicates weakness on Fed’s minutes that includes gradual hiking hints.

The current prices have dipped well above DMAs on daily charts, for now, don't expect any sharp rallies nor a steep slump as it is on the verge of bearish DMA crossover (21DMA crossing over 7DMA), and it is better to devise trading plans that favor bears.

RSI signals losing strength in previous buying interests as it converges to the mild sideways to downswings, while Stochastic has been indecisive but momentum in buying sentiments has been absolutely shrunk away.

Same is the case with leading oscillators on weekly terms to confirm the shrinking buying momentum as both RSI and stochastic have been diverging to the previous price upswings.

Most importantly, whipsaws pattern that has lasted for 2 weeks which is contrary to the previous upswing that’s been hovering at 7DMA.

While MACD has signaled the downtrend likely to extend.

Trading tips:

Well, as a result of above technical reasoning, on speculative grounds we advise tunnel spreads which are binary versions of debit put spreads.

This strategy is likely to fetch leveraged yields than spot FX and certain yields keeping upper strikes at 116.7480 and lower strikes at 115.033 levels.

Alternatively, we advocate shorting futures contract of near-month expiries on hedging grounds for southward target towards 113.169 or even 111.416 levels cannot be ruled out upon breach of 1st targets.

Writers in a futures contract are expected to maintain margins in order to open and maintain a short futures position.