Here’s a quick update on my latest forex ideas and open trades in GBP/JPY and CAD/JPY. Both pairs are on the move and with the BOJ meeting coming up, it is time to adjust.
Original Trade Idea: Playing the Slow Move Higher in Guppy
The British pound drew in a plethora of buy orders yesterday thanks to a big improvement in U.K. wages data. The big move higher changed the picture on the four hour chart, turning it from a slow grind higher to a consolidation/breakout pattern. My entry orders at 189.00 and 190.00 seems out of reach for now, and with the Bank of Japan coming with their monetary policy statement, I’ve decided to close out my open orders to avoid event risk. No trade.
Original Trade Idea: Rising Triangle Break on CAD/JPY
The trend remains intact on on CAD/JPY but bears seem to be really stubborn to let go at the 101.00 area. The market is now pulling back from that area, and with the above mentioned Bank of Japan event coming up, it’s time to be a little bit cautious. I have a feeling we’ll continue to see rhetoric from the BOJ showing confidence in Japan’s recovery progress, which could provide a short-term boost to the Yen.
So, I’ve decided to roll up my stop to 99.20, which is below the rising moving averages, rising trendline, and broken resistance-turned-support area—my technical argument for a long play. This limits my max loss to 0.40% as long as we don’t see anything crazy from the BOJ that may cause really fast markets, making orders prone to slippage.
I may even close the whole position the closer we get to the event, and if we do see something that brings a yen selloff or a rally in CAD/JPY (something strong enough to break the 101.00 resistance area), I’ll look to potentially add to my position to help increase my max gain. Stay tuned!