Dollar/yen surged on Friday and then plunged. Still, the short term remains a buying perspective | the long term stays down

Friday's USD/JPY surged sharply and then sold off all at once.

Because it moved violently both up and down,

"In the end, I don't know which way it will go from here."

I think many people feel that way.

I am currently biased to a short-term long position.

However, that does not mean my long-term outlook has shifted upward.

Long-term, I am still looking lower as before.

This long is aimed at a technical rebound.

Take-profit is in the mid 157s.

I won't chase beyond that.

Friday: From a sharp rise to a sharp fall

First, please look at the current 15-minute chart.

Friday's USD/JPY rose strongly, but then the trend changed abruptly.

After making a high, selling intensified, and it fell to the 156 yen range in a short time.

If you only look at the rise, you would want to buy.

If you only look at the drop, you would want to sell this time.

Because both movements occurred in a short period, it is normal not to know the direction.

In such markets, judging only by the immediately previous large candlestick makes you prone to whipsaws.

Long-term bearish view has not changed

To avoid misunderstanding, I will state clearly here.

I am considering a long in the short term, but the long-term view remains down.

I do not think the bottom was touched by this drop, nor that an upward trend has begun from here.

I have not changed my view of the larger trend.

I aim to capture the rebound from the short-term sell-off with technicals.

That is this long.

Just because the long-term is bearish does not mean you need to short in every situation.

Even during a decline, short-term rebounds occur many times.

In situations where a rebound seems easy to capture, I choose to go long.

The long-term direction and the short-term capture direction are considered separately.

This long is a technical rebound play

The reason I flipped to a buy outlook is not that I think the dollar/yen will rise in the long run.

It is because, after Friday's sharp drop, selling became temporarily skewed, and I see a scenario where a technical rebound can be targeted.

When you see a large bearish candle, it feels like the fall will continue.

However, if you chase new lows after a big selloff, you are prone to a rapid buyback surge.

This time I am aiming to capitalize on that buyback with a long.

I am not predicting a large future rise.

It is a trade to capture the short-term retracement in front of us.

Take-profit mid-157s. Do not be greedy

The target take-profit for this trade is in the mid-157s.

I believe that is sufficient to achieve the goal.

Since the long-term outlook is down, I do not intend to hold the long position longer than necessary.

If you entered aiming for a short-term rebound and then start hoping for "it might rise more," the plan you started with diverges from reality.

You do not need to take every possible profit.

If you can take the range you targeted, you should exit.

This time, exit without greed in the mid-157s.

Do not unexpectedly convert a short-term long into long-term holding.

That is decided from the start.

Even if it goes lower, I imagine it will come back up

Just because I am long does not mean I am certain it will rise immediately from here.

I also consider the possibility of testing lower again.

Even if prices fall further, I expect they will rebound and rise rather than continue falling in one direction.

Therefore I do not aim for a single bottom at one price.

To be prepared for further downside, I keep the position size smaller and maintain some cushion.

"Buying on a long outlook" and "rising straight up now" do not mean the same thing.

Accept the possibility of a pullback, and choose a scenario that moves higher in the short term.

Timeframes differ, so the targets differ

While looking lower in the long term, I aim for gains in the short term.

Some people may feel this approach is off.

But when the time frame you monitor is different, it is normal for the direction to differ.

Even if you see a decline on the daily or weekly chart, you can still look for a rebound on the 15-minute chart.

Conversely, even if the long-term is rising, if the short term has risen too much, you might target a short.

I do not fixate on a single up or down direction.

What are you watching in the long term?

What range am I aiming to capture in this trade?

That is how I separate considerations.

In this case, I maintain the long-term bearish view while only targeting the short-term technical rebound with a long.

Summary

Friday's USD/JPY rose sharply and then plunged.

Because it moved vigorously both up and down, the direction from here is unclear.

I am long in the short term.

However, I have not changed the long-term bearish view.

This long is not aimed at a breakout into an uptrend, but at capturing a technical rebound.

Take-profit is in the mid-157s.

If it returns that far, I will exit without greed.

Even if it falls further, I expect it to rebound afterward.

Do not seek a bottom at a single price; enter with a position size that leaves room for a downside move.

Separate the long-term direction from the short-term range you aim to capture.

That is what I am thinking about now for USD/JPY.

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