USD/JPY: Optionality, trailing stops and risk-off Friday

  • Another failure to test optionality at 109.50 will have longs questioning their resolve.
  • A quick look at the 4-hr chart shows exactly where the trailing stops will be, namely below 108.25.
  • It is risk-off Friday, so we may see some of this week’s positions taken off?
  1. Its highly likely. 61.8% retracement comes in at 108 and it is an even handle. I will be surprised to see 108 go this week. I am expecting USDJPY to touch 110 before it breaks 108. Still a lot of retail traders are shorting this pair but its always the pain trade that wins in trending markets. What are your thoughts?

  2. I definitely agree James that it’s the pain trade that always wins out. Optionality at 109.50, 75 and 110.00 in partic is very large and this will act like a magnet I’m sure

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