Cross-Eyeing: Major Support on AUD/JPY – Profit Taken!

Trade Update: 2011-6-15 04:13

AUD/JPY 1-hour chart

It’s been almost a week since I opened this trade, but it’s finally over! I didn’t hit my profit target, but I was able to walk away with 61 pips in my pocket.

Yesterday’s events were exactly what my trade needed to break out of consolidation. After China pumped out a few upbeat reports, risk appetite picked up and the Aussie went soaring! AUD/JPY also got a boost from yen weakness after the BOJ announced more stimulus for Japan.

Needless to say, I was goin’ nuts when this was happening. First, the Mavs beat the Heat, now this? I must’ve done something REALLY good in my previous life! Haha!

Anyway, my initial excitement eventually died down after I noticed the pair was stalling right below 85.50, which has acted as a strong resistance level in the past. This was also about the same time that news started going around that China raised its reserve requirement ratio. Since it looked more and more like the pair was about to reverse, I decided to bank some pips and close my trade early.

Closed trade manually at 85.41: +61 pips/ +0.4%.

Yeah, it sucks seeing that price eventually popped up to hit my profit target. But I think it was a good, justified call to close my trade early. The signals for a reversal were there – Stochastic was oversold and shooting stars had formed under a resistance level.

It may not be a big win, but a win is a win. Hopefully, I can string together some more!

That’s it for today! Thanks for following, fellas! May the pips be with you as always!

Trade Update: 2011-6-14 00:56

AUD/JPY 1-hour chart

The Australian dollar was all over the place the past few days, and for awhile, it looked like the pair was headed for new lows on Friday. However, AUD/JPY overcame the wave of risk aversion and is now back above 85.00.

It seems that the markets have reacted positively to the release of Chinese data despite the mixed results. Inflation remains waxing hot at 5.5%, which could give reason for the PBoC to raise rates.

On the other hand, industrial production growth printed at 13.3%, better than the expected 13.1% figure and fixed capital investment was up 25.8% year-to-date. These figures indicate that the economy is still doing well. With China being one of Australia’s biggest trade partners, if it continues to whoop it up, Australia definitely stands to benefit.

In any case, the Aussie got a nice boost following the release, helping out my trade! Boomshakalaka!

Right now, I think the 85.50 handle could be the line-in-the-sand mark over the next couple of days. This served as a strong resistance level late last week, so we could see some action at that point.

Hopefully this trade keeps going my way and makes it way up to 86.00, which is just above this week’s top WATR.

If you have a position on AUD/JPY as well, lemme know how you plan to manage your trade!

Trade Idea: 2011-6-09 03:21

Lots of big things going down today (BOE and ECB rate statements), so I decided to trade a pair that involves less event risk… my archnemesis AUD/JPY!

AUD/JPY 4-hour chart

The Aussie has been taking quite a beating this past week. But even with the RBA‘s not so hawkish rate statement, this morning’s weak employment data, and general risk aversion, it has managed to trade within its range.

I’m not just talking about AUD/JPY either. The same holds true for AUD/USD. It’s still trading within that 150-pip range that it began in late May. Right now, both these pairs are trading at near critical weekly levels, which according to my experience, have a tendency to hold.

More specifically, AUD/JPY’s current weekly ATR and previous week low line up perfectly with a former major support zone.

That being the case, I think it offers a setup worth taking a risk on, so I went long at market (84.80) and set my stop below the 84.00 handle. I’ll probably consider taking profit somewhere near the WO at around 86.00 since it’s the next potential resistance area, but I may hold on for more if the candles support further bullishness.

Basically, here’s what I’m looking at:

Long AUD/JPY at market (84.80), stop loss at 83.80, profit target at 86.00.

I realize the risk-reward ratio on this trade isn’t really ideal, given that it’s just a little better than 1:1, so I’m limiting my risk exposure to this trade and putting just 0.5% on the line.

If you guys have any comments or suggestions, lemme have ’em! Y’all can hit me up on Twitter and Facebook. Peace!

  • Maxiv

    ow nuts!!!! MISSED THE MARK now heading up! too bad…. would have been a great trade!

    • cyclopip

      Were you able to get in on the pullback?

  • Candle pip maker

    Yep look like it might be a nice trade but watch out for that BoJ interest rate decision on Tuesday, good luck and may the pips be with you.

    • cyclopip

      We’ll see what happens. So far the support level has been holding. Hopefully the pair bounces back up. You in this trade as well? 

  • cyclopip

    So far, the BOJ’s announcement (more stimulus for Japan) has been yen bearish. I hope this keeps up! I need 85.50 to break down!

  • jonboy700

    I’ve been playing the range on this one.  Thankfully, it seems to be
    trending upward.  I’m wondering if 86.00 might be a little modest.

    • cyclopip

      Risk appetite is up so far this week. I actually closed early when it looked like 85.50 was holding. Are you still on this trade?

      • jonboy700

        Full disclosure here: I saw the trend but didn’t take advantage of it – arrg!  I’m currently shorting it & looking for an 85.00 correction.

        • cyclopip

          That happens, mate. But so far, your short is lookin’ good! If  you had shorted when the pair was consolidating at around 86.00, you’d be about 50 pips up by now!

  • Dylanos

    Thanks for pointing that one out. It worked out nicely. As it had moved up a little, I put an order in for 84.64 plus a stop and went to bed (hoping for a pullback). Woke up to a nice looking screen the following morning!

    • cyclopip

      Were you able to get in? Didn’t quite make it to the week open yesterday.