Cross-Eyeing: Short Guppy Opportunity? – Trade Update

Trade Update: 2010-11-25 03:25

GBP/JPY 4-hour Chart

Guppy dropped down to hit my profit target, but unfortunately, my order didn’t get triggered!

The pair didn’t quite test the 38.2% level,and dropped down to test the lows just below 131.00. Still, the pair hasn’t made a new low. In addition, it’s starting to look like the pair is forming a bearish flag.

For now, I’m going to take off my orders, wait the Thanksgiving holiday out and reevaluate this trade come Monday. You never know what might happen over the weekend and I don’t wanna get hit by some unexpected news.

So for now, time to chill out and get ready for a killer Thanksgiving dinner with the rest of the FX-men!

Trade Idea: 2010-11-24 01:44

GBP/JPY 4-hour Chart

Now let’s see if we can make it three wins in a row!

I spotted a nifty little setup forming on GBP/JPY. Price broke support sometime last week and now looks like it’ll retest this level. This looks like a good place to take advantage of risk aversion and sell GBP/JPY since it’s in the area of a former resistance and the 38.2% Fibonacci retracement level. Kill zone, baby!

Since my trade idea relies on the resistance-turned-support level to hold, I think it’s safe enough to set my stop 100 pips above my entry point, just a few pips above 133.00 and the 61.8% Fib level. But should price move my way, I will close half my position near yesterday’s low at 130.90. As usual, I plan to let the rest ride.

Fundamentally, I am biased towards the safe haven currencies like the yen and franc. Didn’t you see what happened yesterday? European debt concerns are the central theme in the market right now and I just don’t see that going away anytime soon. Spain and Portugal have problems of their own and I think traders will be keeping a close eye on those two.

Now, my orders are a little way off still, but there are some reports coming out today that could move the markets. First, we’ve got the revised GDP report coming out from the U.K in a couple of hours. Then, there’s also the durable good and unemployment claims data scheduled for release at 1:30 pm during the New York session. These reports could provide the volatility needed to help my trade get triggered.

Again, here’s my gameplan:

Short GBP/JPY at 132.10, stop loss at 133.10, PT1 at 130.90.

Can’t wait for tomorrow – Thanksgiving baby! Yes, even though I’ve only got one eye, I still have a lot to be thankful. Imma enjoy my weekend of sports, beer, and bunnies! Ya see, where I’m from, we don’t have any turkeys, so we gotta make do with bunnies.

That’s it for now. Thanks for checking out my blog and if you decide to trade over the holidays, good luck!

  • igetfx

    This is turns out to be a profitable trade for me. Thank you for this great analysis! Reminds me of what I have been learning over the past few years of how we should conduct our analysis deeply and with caution. Just another great technical analysis presented here in BabyPips. Great Stuff!

  • igetfx

    This is turns out to be a profitable trade for me. Thank you for this great analysis! Reminds me of what I have been learning over the past few years of how we should conduct our analysis deeply and with caution. Just another great technical analysis presented here in BabyPips. Great Stuff!