USDJPY Short Opportunity: Key Factors and Strategic Entry

Hello, traders!

I’m on standby to short the USDJPY, and here's why this setup is compelling. This analysis covers two crucial parts, providing context and strategic entry points.

Part One: Macro Fundamentals

1. China’s Treasury Offload:

- China sold $53.3 billion of Treasuries and agency bonds in Q1 2024. This reduction in US dollar assets can impact USDJPY negatively.

2. BRICS Currency Moves:

- BRICS countries are trading $4 billion in local currencies, sidelining the US dollar. This shift decreases demand for USD, potentially weakening USDJPY.

Part Two: BOJ Interventions

1. Recent BOJ Action:

- The Bank of Japan intervened in the FX market on April 29, 2024, but the attempt seemed to fail. Our community was alerted on April 26, 2024, giving us an early advantage.

2. Potential Future Intervention:

- BOJ might intervene again, but this could upset G7 partners. If intervention fails or doesn’t happen, USDJPY could fall sharply.

Trading Strategy: Bearish Patterns Confluence

Key Levels and Patterns:

- Entry Point: Short USDJPY at 159.27.

- Confluence: This level aligns with a Bearish Bat Pattern and an ABCD Pattern, strengthening the case for a short position.

Final Thoughts
Considering the macro fundamentals and recent BOJ actions, the stage is set for a potential sharp fall in USDJPY. The bearish patterns at 159.27 provide a technical basis for entry, adding to the conviction.

Stay vigilant and manage risk carefully. Happy trading!