Trade Update: 2011-12-19 4:38
During the Tokyo session, the pair spiked back above the 78.00 handle. Seeing that GBP/JPY and EUR/JPY (a little bit) also spiked up, I was scared that the BOJ could be behind the move. So I immediately opened my platform and closed my trade. Luckily, it was at breakeven.
It turns out that the spike was nothing more than a reaction to the news of North Korean leader Kim Jong Il’s death. I have to admit, I’m a little bummed about not getting some make up money. But then again, on the brighter side of things, at least I didn’t close my trade with a loss.
Trade Idea: 2011-12-15 2:08
As you all know, I’m a trader who loves to trade based on price action and support and resistance levels. Looking at the 4-hour chart of USD/JPY, you can see that the pair is stalling around the former highs. I suspect this level has turned to major resistance, and we could see the pair tumble down again. My bearish bias is confirmed by the overbought Stochastic.
It may just be a simple range play but the potential reward is pretty high. I’m ultimately aiming for 76.60, which is a recent swing low, but I will take some profit at 77.30. As for my stop, it is relatively tight at 34 pips. I believe if price makes a new swing high, my trade is invalidated.
I know, I know. The yen has been losing to the dollar for the past few days thanks to positive data from the U.S.
However, as Pip Diddy pointed out in his daily forex fundamentals report, we have a handful of economic data on tap from the U.S. today. I’m thinking that it would only take one disappointing report to upset investors and get the yen rallying.
On top of that, with USD/JPY already trading around the 78.00 handle, it seems like talks of another BOJ intervention has died down. And so, I have a feeling that traders will have more confidence in rooting for the Asian currency.
That’s my two cents! Now, let me recap:
Short at market (78.06), pt1 at 77.30, pt2 at 76.60, stop loss at 78.40. As always, I’ll risk 1% of my account.
Gosh! I sure do hope I get to extend my winning streak with this trade. Wish me luck!