Trade Cancelled: 2010-10-17 19:22
As it turns out, I was just a day too late on this trade setup. Price continued to rise and eventually hit the top of the range around 81.25, before dropping to 80.20 before the weekend. I had actually closed my orders before last Friday’s U.S. session, to avoid any crazy moves that might have occurred after the release of all that date.
So, I didn’t get a triggered but at least no harm done to my account. Just need to find another high probability setup this week!
It’s been awhile since I’ve posted a trade, as I got hit with pink eye last week. As you can imagine, I wasn’t exactly seeing things straight (kinda tough if you only have one eye to begin with!), so I decided to just rest up.
Now that I’m fully recovered, I think I’m ready to tackle the markets!
For the past couple of weeks, the pair has been stuck in a range of about 130 pips, trading between 80.00 and 81.30. Look at that – it just keeps bouncing up and down between the support and resistance levels!
Fundamentally, I think AUD/JPY ought to keep from breaking out of its range. I don’t think we’ll see any catalysts for big moves since neither Australia nor Japan are scheduled to release any hard-hitting reports this week. So things will probably stay chill.
Why am I siding with the Aussie on this one and not with the yen?
Well, the Aussie has a lot of fundamental reasons to back up its rise. For one, Australia has been doing much better with its recovery than most major economies. Last week’s employment data showed that the labor market is picking up.
Secondly, even though the RBA decided to hold rates at 4.50%, many say we’re likely to see another rate hike before the year ends. Adding to that, gold prices have been rising. With traders still bullish on gold, who’s to say it still won’t keep rising and carry the AUD along with it?
And let’s not forget, there’s always the possibility of another BOJ intervention, especially now that the yen is forging new highs. Interventions usually blow the yen crosses sky-high!
Currently, the pair is in the middle of the range, so I’m going to wait for a test of the support level at 80.00 before jumping in. I’m going to go with a relatively tight stop on this trade, putting my stop loss order at 79.50. As for my take profit point, I’ll be aiming for the top of the range at 81.25.
Again, here’s my plan:
I have to be a lil’ wary of leaving this trade open too long, as a ton of economic reports is going to be released from the U.S. on Friday. I’ll be sure to cancel or update my trade before then.
And now, I gotta go! I think I smell something cookin’ in the BabyPips.com kitchen… I wonder what it could be…