There is no such thing as a free bet in any currency pair and this was again evident yesterday in USD/JPY. The market was short and bearish and the combination of option protection at 88.00 and a big buy order (see Jamie’s always excellent wrap) was enough to send shorts scurrying for cover. This introduced some welcome volatility into USD/JPY and allowed the traders rather than the position takers their day in the sun. I still believe that the down trend is back in control but now that some doubt has been sowed in the minds of the bears, we should see some decent moves in both directions.
I’m looking to trade the outsides of an 88.00/90.00 range now in this pair and hopefully we see both sides a few times.
Good luck today.