Back on the 28th-31st of March, the US dollar gave back a small portion of the incredible gains it had made from 115 to nearly 125 (10 big figures).

This USDJPY reversal trade is looking for a similar setup, in that the run up has been incredible again and has the potential for traders to think the USD is overbought at the current levels.

This trade is against the dominant trend, so a strict stop loss must be used. And the profit target is reasonably small, at around 100 pips. The risk reward is around 1:1, so not a big R multiple win potential here.

Nevertheless, if you feel the USDJPY is overbought and are looking for a possible short trade setup, this could be worth looking at. Not recommended for newbie traders.

USDJPY short, looking for overbought retracement

Apr 20 2022

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