Dollar/yen seems likely to retrace fully. But from here I will go short.

The USD/JPY is strong.

From the point it plunged into the 155 yen area, it has recovered to the 158 yen area.

Honestly, the rebound is stronger than I expected.

I think many people look at this chart and think this way.

“With this momentum, it will retrace all the way. Then going long would be fine.”

I understand that feeling. In the short term, yes.

But I will start selling from here.

I will write the reasons.

It has returned to the 158 yen area. Stronger than expected

First, let's assess the current situation.

From around the high near 164 yen, it was sold off rapidly to the 155 yen area.

From there, it rebounded, and now it’s in the 158 yen area.

Most of the decline has already been retraced.

As a rebound, it is fairly strong. It has been rising steadily, and has not formed a meaningful pullback.

Just by looking at this movement, it seems to want to go higher.

Therefore, it is natural that some people think it will retrace all the way back.

“Momentum is strong” does not guarantee where it will go

Here is one thing I want to distinguish.

The current strong movement and the continued rise in the future are two different things.

I think retracements are usually sharper when the move is strong.

After a sharp sell-off, sellers’ profits are realized and buyers pick up the lows at the same time. So the rebound is fast.

But that is a reaction to supply and demand. It doesn’t mean the direction has changed.

From my method, there is a scenario where we test the mid-157 yen level again.

It is not finished after a full rebound. I see another moment to test lower levels. That’s how I view it.

To be honest, I don’t know the upper target

I’ll be honest here.

I don’t know how far the rebound will go.

Will it stop at the 158 yen area? Reach into the 159 yen area? Or higher?

It is quite difficult to pinpoint a single upper target in this situation.

The stronger the rebound, the less reliable the judgment of “this is where it stops” becomes. Moves that break through resistance without regard to it can and do occur.

So I won’t try to predict it.

I don’t aim to predict what cannot be predicted.

Instead, I choose a way to enter that can be valid even if I’m wrong.

Therefore I will “sell on the way up.” I won’t aim for a single point

What exactly will I do?

I will gradually sell a small amount each time it goes up with a thin lot.

I won’t enter with a single trade. I will divide my entries.

What happens then?

If my reading is wrong and it rises further from there, if I had entered a single trade, I would have a large unrealized loss at that point.

But if I enter in parts, I can add more at better prices as it rises. The average cost rises.

In other words, being wrong won’t be deadly.

What matters isthe premise of thin lots.

If you don’t stick to this, you’ll just average in. If you go in thick and then buy more to average up and it moves higher, you’ll be wiped out the moment it rises.

Because the position is thin, you can divide it. Because you can divide it, you don’t need to aim for a single point.

And decide in advance where you will give up. If the price exceeds the decided level, you discard the scenario at that moment.

Selling on the rise is not the same as stubbornness.

Why the premise of thin lots

Let me write a bit more concretely.

Decide in advance how much you can lose on one trade. What percentage of your capital can you tolerate? Generally 1–2% is a guideline.

Divide that amount by the distance to your stop loss.

Lot = (Capital × Risk%) ÷ Stop loss distance

This determines the lot size you should take for the trade.

In a selling-on-the-rise scenario, divide that amount into multiple parts from the start. Don’t use it all at once.

The worst thing is to use up all your allowance in a scenario where you think it might go higher.

If you leave some room, you can respond to unexpected moves. If you have no room, you’ll be left praying.

The more confident you are in the direction, the more careful you must be with this.

The down-swing phase has not ended yet

Finally, a big forecast.

I believe the phase of testing the lows still remains.

Right now the rebound looks strong, so it might seem over. But a market that has been sold off heavily does not return to its previous state as if nothing happened.

It rebounds, then the highs are resisted, and then it tests lower again.

I expect another cycle to occur once more.

So I do not see this rise as a trend reversal. I view it as movement within a rebound.

Of course, it could be wrong.

If the rebound fully breaks above the upper levels and shifts to an uptrend, this forecast would be proven wrong, and I will step down honestly.

What I will decide is where I will admit my mistake. That is enough.

Summary

・The USD/JPY retraced from the 155 yen area to the 158 yen area. Stronger than expected
・Momentum being strong and continuing higher are different matters
・Technically, I see another move to test the mid-157 yen area
・However, it is difficult to pin an upper target with a single point
・Therefore I won’t try to predict and will sell on the thin side as it rises
・Thin allows you to divide. Dividing means even if you miss, it won’t be deadly
・The down-swing phase is not finished yet

“If it retraces fully, it’s fine to go long.”

I think it’s best to pause when you feel that way.

Do you see the current rebound as a turning point or just a passing stage?

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