Should I stay or should I go? Strange things are happening on USD/JPY and I think the signs are pointing to an upcoming dollar strength. What do you think?
Original Trade Idea: Make or Break for USD/JPY
Trade Update: Make or Break for USD/JPY
As I mentioned in my update last week, I have adjusted my stop loss as soon as USD/JPY got close to my 100.00 profit target.
It’s been days now, though, and the 100.00 mark is still as elusive as a Venusaur in Pokemon Go. Should I stay in this stay in this trade or should I go now and take my profits?
The daily chart is the biggest reason why I’m keen to close all my positions. USD/JPY still hasn’t gone below last week’s low AND the bottom weekly ATR, which tells me that the bulls are holding the fort pretty well. Fundamentally, there’s also no news from the BOJ (or the Fed) that could drag this pair below the support levels.
Even the 1-hour chart is giving me the heebie-jeebies. See, the 100 SMA has already crossed ABOVE the 200 SMA. If you squish your own charts, you’ll know that SMA crossovers have given legit trend-reversal signals on this pair as far back as late April. Taking this crossover seriously would mean that we might be looking at a reversal in the making after all.
For now I’ve moved my stops further down to 102.50, which is just above the falling trend line AND SMA crossover on the 1-hour time frame. I figured the pair is indeed due for a rebound if it breaks above the downtrend. If USD/JPY fails to make new lows after tomorrow’s U.S. retail sales report, then I’ll likely close my positions before the week ends.
What do you think? Should I hold or should I close these positions? What would you do if this was your trade?