Closed Open Orders: 2010-03-07 21:40
D’oh! The bearish pennant chart pattern I’ve been watching with my one good eye indeed broke out last week… but to the upside! Needless to say, my short entry order failed to trigger when the pair rallied upside.
I’m not sure but it seems like we’re in the middle of a sentiment shift. After we got some good news from the NFP report on Friday, higher yielding assets like the pound posted rose. But before that, the yen took a beating on news of potential currency intervention by the BOJ. This led to the breakout on the bearish pennant, as well as a rise in other yen pairs.
However, unless the crosses start making new major highs, I’m going to hold on to my bearish bias on the yen crosses, especially now that they are about to hit significant resistance and Fibonacci retracement levels.
Once again, I missed out on a trade. It’s a little frustrating but like the NBA season, trading is a grind! Gotta roll with the punches and keep moving forward!
Trade Idea: 2010-03-04 01:51
The BOE rate decision is due later on and I can’t wait! Remember how BOE officials have been saying that the central bank is keeping its doors open for further quantitative easing? Well, given the UK’s sluggish economic performance, they could announce an addition to their £200 billion bond-purchase program today. Although the BOE is widely expected to hold interest rates steady at 0.5%, more monetary easing could confirm speculations that the British economy is still in a rut. But before that, the UK will also release its Halifax HPI at 9:00 am GMT. An increase of 0.3% is expected, half as much as the 0.6% uptick seen previously.
If we do see an expansion of the BOE’s asset purchase program, this may just cause traders to sell the pound once again and run back to safe havens – the USD and JPY.
Technically, a bearish pennant chart pattern has formed on the 4-hour chart of the GBPJPY. I’m looking to go short once price breaks past last month’s low and ultimately aim for last year’s low somewhere around 120.00. Since my TP is quite far, I’ll be trailing my stop once my first profit target is hit. As for my stop, I’ve set it 200 pips away, which is roughly equal to the pair’s average pip movement per day.
Short GBPJPY at 131.90, pt1 130.00, pt2 at 120.00, stop loss at 133.90.
As always, remember to adjust position sizes accordingly and never risk more than 1% a trading account in any single trade!