Catching AUD/JPY on a Retracement – Orders Cancelled

Orders Cancelled: 2013-04-11 23:01

AUD/JPY 1-hour Chart

Well, so much for that!

As it turns out, the Aussie bulls simply shrugged off the poor employment figures and continued to buy up the Australian dollar!

I wouldn’t have had any problems with this except for the fact that price was just pips away from hitting the 38.2% Fib but didn’t! It just suddenly reversed and hit my initial profit target, leaving me behind in the process! Drats! What rotten luck!

Since price hit the recent high, I decided I was better off just cancelling my orders, since my trade idea was based on a Fibonacci retracement play and was technically invalidated.

Looking across the board now, I think the yen pair uptrend may be losing momentum. AUD/JPY seems to be forming a triple top, while USD/JPY is having trouble with that 100.00 mark. This will be something to keep in mind when I look through yen crosses next week!

Trade Idea: 2013-04-11 00:01

AUD/JPY 1-hour Chart

Who’s sick of shorting the yen? Not me, that’s for sure!

AUD/JPY is falling right now thanks to terrible employment figures from Australia. Apparently, 36,100 jobs were lost last month, while the unemployment rate unexpectedly ticked up to 5.6%. It was anticipated that only 6,700 jobs would be lost and that the jobless rate would remain steady at 5.4%.

This has sent AUD/JPY crashing from its recent high at 105.30, as its now trading nearly 100 pips lower.

Still, I can’t help but feel that this would be an excellent opportunity to hop on the overall up trend. Remember, the Bank of Japan just revamped its asset purchase program and it looks like it will do anything it can in order to get inflation up to its 2% target. That said, I don’t think the markets are done shorting the yen just yet, with many traders will be looking for ways to add to their long JPY cross positions.

Looking at the 1-hour chart, I see two potential areas where I could buy, with both lining up closely with former resistance levels.

The first is at 104.35, which also coincides with the 38.2% Fibonacci level. Seeing as how retracements have generally been pretty soft, I think I’ll put on half of my position at this price point.

The second is at 103.80, which lies just above the 61.8% Fib level. Seeing as how Stochastic isn’t quite oversold yet, we could see a deeper retracement and we may see price drop all the way to this level.

Here’s my gameplan:

Buy AUD/JPY at 104.35 and at 103.77%. Half positions of 0.25% at each level, which leaves me with a total risk of 0.50% of my account. My stop will be at 103.45, far below the 61.8% Fib level. Aiming for 105.25, but willing to hold on for larger gains.

Overall, I hope this pans out for me. If both positions trigger and price climbs up to 105.25, I should take home a reward-to-risk ratio of about 1.9:1.

Who’s willing to join me on this setup?

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  • piptrader

    hmmm….idea already a success…stocs. r sitll ok..hmmmmmmmmmm…lets seeeee…

    • cyclopip

      Let’s see. it didn’t test the Fib and it’s climbed up a bit already.

  • Jolcia

    did you jumped back on it?