With only a few more weeks until the debt ceiling deadline, I decided to start building up positions.
I mentioned on my Twitter and Facebook posts yesterday that I was thinking of buying USD/JPY on a retest of the rising trend line on the daily chart. Fortunately, I was able to read a few more articles about how the dollar has consistently weakened in the weeks leading to a U.S. debt ceiling deadline.
I found a short entry opportunity on the 4-hour chart! The pair just can’t trade above 99.50 right now, probably because the MiPs is also a mid-channel resistance on the chart.
In any case, I have already placed my sell order at 99.50 with a 150-pip stop that should be above the channel. Right now I’m aiming for a 1:1 trade with my initial profit target at 98.00 and a plan to manually trail my stop. I’m also risking 0.50% of my account on this trade.
If the trade goes my way and the pair breaks below the channel, then I might consider adding to my position until the debt ceiling debates are over (or postponed). However, if the BOJ decides to jawbone some more or if the debt ceiling issue isn’t as dollar bearish as I thought this time around, then I’m also willing to cut my losses and even reverse my position.
That’s it for me today! What do you think?