Outrageous Predictions
Executive Summary: Outrageous Predictions 2026
Saxo Group
Read Saxo's Outrageous Predictions for 2026, our latest batch of low probability, but high impact ev...
You can access both of our platforms from a single Saxo account.
A tactical USDJPY long on November seasonality
Trade View 6 minutes to read
Medium Term / Buy
Kay Van-Petersen
Global Macro Strategist
Summary: USDJPY could see new highs north of 120.00 on a pronounced break through 115.00.
Instrument: USDJPY
Price Target: 116.00, 117.00, 120.00
Market Price: 113.04
Background:
The Macro Monday book goes long $20 million of USDJPY from the 112.78 level with the thesis that we will soon challenge the 114.55 highs and break through 115, which would open up the cross for a potential move to 120.
We see a target price at new highs north of 116.00 to 117.00 for half the position, with the balance looking for a 120-plus handle. Apart from the recent price action of USDJPY – a lack of yen buying in the October equity sell-off plus overall higher US yields and rates – the main rationale for this trade is based on historical seasonality for USDJPY in November.
As you can see from the five-year seasonality grid below, the average historical move in USDJPY has been +401 basis points, with the skew being +920 bps to -97 bps. It's worth noting that on a 10-year historical range, the average drops to +198 bps and the skew, while still asymmetrical, drops drastically from +920 bps to -108 bps.
USDJPY closed last week over the key 200-week moving average of 113.03 – a second consecutive close above that point would bode well for USDJPY bulls.
We see a target price at new highs north of 116.00 to 117.00 for half the position, with the balance looking for a 120-plus handle. Apart from the recent price action of USDJPY – a lack of yen buying in the October equity sell-off plus overall higher US yields and rates – the main rationale for this trade is based on historical seasonality for USDJPY in November.
As you can see from the five-year seasonality grid below, the average historical move in USDJPY has been +401 basis points, with the skew being +920 bps to -97 bps. It's worth noting that on a 10-year historical range, the average drops to +198 bps and the skew, while still asymmetrical, drops drastically from +920 bps to -108 bps.
USDJPY closed last week over the key 200-week moving average of 113.03 – a second consecutive close above that point would bode well for USDJPY bulls.
Parameters:
Entry: 112.78
Stop: n/a
Target: 116.00-117.00
Time Horizon: One to three months
Some final thoughts and a contrarian view
Given that USDJPY volatility has been relatively subdued, one could also look to express this trade through long calls and call spreads, or even out-of-the-money 115 calls.
You could also look to play a six-month one-touch with a 120 strike; with an expiry of 26 April you would be paying about 18% in premium. Remember as well that these can always be closed out before 120 is reached and/or prior to expiry.
Finally, those looking to play the reverse of this trade view could potentially put their stops above the recent 114.55 highs, targeting a break for 111.32.
Given that USDJPY volatility has been relatively subdued, one could also look to express this trade through long calls and call spreads, or even out-of-the-money 115 calls.
You could also look to play a six-month one-touch with a 120 strike; with an expiry of 26 April you would be paying about 18% in premium. Remember as well that these can always be closed out before 120 is reached and/or prior to expiry.
Finally, those looking to play the reverse of this trade view could potentially put their stops above the recent 114.55 highs, targeting a break for 111.32.
Management And Risk Description:
There are both fundamental as well as technical risks to this tactical break-out higher call. First, a technical pullback and a weekly close below the 100-week moving average of 111.32 would potentially put this cross back into bearish control. Second, any kind of sharp and prolonged pullback in US yields and rate expectations could move the cross lower. Third, if we were to potentially see a blow-up in emerging markets or a massive dislocation in equities (S&P 500 down 5% in one day, VIX over 30, etc.) then the yen may get a bid.
Finally, while positioning in yen shorts is not at extremes against the USD, on a broad basis the market is quite long the US dollar, which always invites positioning risks.
Finally, while positioning in yen shorts is not at extremes against the USD, on a broad basis the market is quite long the US dollar, which always invites positioning risks.
Latest Market Insights
Outrageous Predictions 2026
-
-
Outrageous Predictions
A Fortune 500 company names an AI model as CEO
Charu Chanana
Chief Investment Strategist
Can AI be trusted to take over in the boardroom? With the right algorithms and balanced human oversi... -
Outrageous Predictions
Despite concerns, U.S. 2026 mid-term elections proceed smoothly
John J. Hardy
Global Head of Macro Strategy
In spite of outstanding threats to the American democratic process, the US midterms come and go cord... -
Outrageous Predictions
Dollar dominance challenged by Beijing’s golden yuan
Charu Chanana
Chief Investment Strategist
Beijing does an end-run around the US dollar, setting up a framework for settling trade in a neutral... -
Outrageous Predictions
Obesity drugs for everyone – even for pets
Jacob Falkencrone
Global Head of Investment Strategy
The availability of GLP-1 drugs in pill form makes them ubiquitous, shrinking waistlines, even for p... -
Outrageous Predictions
Dumb AI triggers trillion-dollar clean-up
Jacob Falkencrone
Global Head of Investment Strategy
Agentic AI systems are deployed across all sectors, and after a solid start, mistakes trigger a tril... -
Outrageous Predictions
Quantum leap Q-Day arrives early, crashing crypto and destabilizing world finance
Neil Wilson
Investor Content Strategist
A quantum computer cracks today’s digital security, bringing enough chaos with it that Bitcoin crash... -
Outrageous Predictions
Taylor Swift-Kelce wedding spikes global growth
John J. Hardy
Global Head of Macro Strategy
Next year’s most anticipated wedding inspires Gen Z to drop the doomscrolling and dial up the real w... -
Outrageous Predictions
SpaceX announces an IPO, supercharging extraterrestrial markets
John J. Hardy
Global Head of Macro Strategy
Financial markets go into orbit, to the moon and beyond as SpaceX expands rocket launches by orders-... -
Outrageous Predictions
China unleashes CNY 50 trillion stimulus to reflate its economy
Charu Chanana
Chief Investment Strategist
Having created history’s most epic debt bubble, China boldly bets that fiscal stimulus to the tune o...
Disclaimer