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USDJPY-Buy-stop

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USDJPY Buy Stop Pending Order

The pair has been consolidating within a fairly tight range of only 70 pips on the 4-hour chart.  This period of consolidation is out of kilter with the number of fluctuations in price action we have seen over the last few weeks.  The safe-haven status of the yen currency is at risk due to the looming problems associated with the Coronavirus and the impact on the Japanese economy.

The Japanese government has stated that they are ready to declare a state of emergency in various provinces throughout Japan.  They have also indicated they are about to widen their stimulus package which will involve injecting trillions of yen into the economy.  This, coupled with the Japanese pension funds looking too heavily invest in other global funds, and various bond purchasing exercises, which will also involve millions of yen being injected to try and stimulate the Japanese economy and also to mitigate against the risk that the pandemic poses in Japan.

Therefore,  although this is a largely fundamental set up,  the downside in the pair looks to be stalling and where the previously mentioned measures by the Japanese government could cause weakness in the yen and therefore send this pair bid, at least to recent highs of around the 111.50 area, which will be our target.

Summary of the Trade
  • Order entry: Buy stop level at109.30
  • Stop-loss 108.50
  • Target 111.50
Risk:
  • Standard lot: $780
  • Mini lot: $78
  • Micro lot: $8

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