This is definitely a risk trade, so I’d only take it with smaller size — especially with important economic data coming out today, which could add even more volatility.
The dollar has been very strong, and until proven otherwise, that trend should probably be respected. That said, even a short-term pullback in the dollar could support this idea.
Everyone seems to be bearish on the Japanese yen — and honestly, maybe everyone is right. 🙂 The COT report also reflects that, with large speculators holding their biggest short yen position since July 2024.
But that’s exactly what makes this interesting to me. The short yen trade looks crowded, and crowded trades can become fuel for a squeeze if price starts moving the other way.
My first short-term target would be the previous lows. If price gets accepted back above that area, I think we could see a decent squeeze higher.
The dollar has been very strong, and until proven otherwise, that trend should probably be respected. That said, even a short-term pullback in the dollar could support this idea.
Everyone seems to be bearish on the Japanese yen — and honestly, maybe everyone is right. 🙂 The COT report also reflects that, with large speculators holding their biggest short yen position since July 2024.
But that’s exactly what makes this interesting to me. The short yen trade looks crowded, and crowded trades can become fuel for a squeeze if price starts moving the other way.
My first short-term target would be the previous lows. If price gets accepted back above that area, I think we could see a decent squeeze higher.
ノート
For execution, I’d mainly look at the 1H chart, and if I want to get really granular, I’d drop down to the 15m. My preferred setup would be a high-volume break below recent lows, followed by a reclaim back above that level — basically trapping the breakdown traders and giving the squeeze a cleaner trigger.
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