Taking off my CAD/JPY short orders after the pair gets slammed this past week, while adding orders on a slow moving GBP/JPY ahead of U.K. unemployment data.
For this week, I’ve decided to play the slow grind lower in GBP/JPY ahead of a potential catalyst in the form of the upcoming U.K. unemployment data. The claimant claims have been on the downtrend in the past few months according to Forex Gump’s Trading Guide, with an expectation for another increase in claims in November.
With the odds of more unemployment claims and a currently downtrending British pound, I’m going with a very small short position; not only because of the potential volatility from this data point, but also from the upcoming FOMC statement that should have global volatility influences. Not sure what the Fed will do or how the market will react, which is why I’m going with a pretty wide stop and very small position. My target is the previously strong support area last seen at the end of September. Here’s what I’m doing
Short quarter position GBP/JPY at 184.00, max stop at 185.75, max profit at 181.00
I’m only risking 0.25% of my account on this one, and with this trade structure, I have a potential reward-to-risk ratio of about 1.71:1. Of course, anything can happen in the forex markets, so if the story changes I’ll be sure to reassess and adjust quickly if necessary.
Original Trade Idea: Forex Trade Idea: Another Shot at CAD/JPY
No luck on my CAD/JPY short as the extremely weak oil markets drag down the Canadian dollar (oil exports are about 10% of Canada’s GDP). There was hardly a hiccup in the down move, or in other words, I didn’t get the pullback I wanted to get in short at better prices. The market never hit my 91.50 trigger level, and with the current prices 300 pips away from my entry (as well as the upcoming FOMC meeting), I’ve decided to close my open orders to short at 91.50 and 92.75. No trade.