Good morning forex friends! With a really busy economic calendar this week, I thought I’d adjust the stop on my USD/JPY long forex position to lock in gains ahead of event risk.
Original Trade Idea: USD/JPY Back to a Major Support Area
The major support area held as it did before and thanks mainly to a round of Japanese yen selling at the end of last week despite the Bank of Japan hinting that an exit from their quantitative easing program is in the realm of discussion now. I guess with Tokyo Core CPI data still ticking lower, not many forex traders are ready to believe that inflation will pick back up in Japan and that the BOJ will exit QE anytime soon.
In a strong move to close out the week, most yen pairs made their moves higher, including USD/JPY which made its way to the top of the recent range around the psychological level of 120.00. With the major psychological level now broken (as well as consecutive lower “highs”) and possibly now behaving as support, I’ve decided to tighten up my stop to just below it to lock in profits ahead of what could be a very heavy and volatile forex calendar. Here’s what I’m doing:
Adjust stop to 119.80 to lock in 80 pips on a half position.
Close entry orders at 118.00 for second half position.
So, there’s a good chance I’ll get stopped out for a small profit of 0.20%, but if I’m lucky enough for more buyers to jump into USD/JPY, then I’m still open for a bigger potential profit. If it all works out for me in that I’m still in the trade after the NFP report on Friday, I’ll probably look to add to my position to maximize my potential gain. It’s up to the market from here…Stay tuned by following me on Twitter and Facebook!