Trade Update: Long-Term USD/JPY Correction

So far so good on my USD/JPY trade! Now that the pair has covered quite a bit of ground, it’s time for me to make some risk adjustments to protect my profits. In case you missed it, don’t forget to read my initial trade idea.

USD/JPY Trade Idea

I may be looking at the weekly chart in terms of the major correction on this pair, but I’m also checking out the short-term time frames for nearby inflection points. Price just hit resistance at the 109.00 major psychological level, which happens to be right around the pair’s average weekly pip movement, so several bulls must’ve booked profits there and triggered a brief pullback.

I’m seeing a short-term rising trend line on the 1-hour time frame so I’m inclined to move my stop just below that support area. Fortunately, that’s slightly above my entry point at 107.75 so I could be able to roll my stop up to 107.85 while locking in a few pips.

USD/JPY 1-hour Forex Chart

USD/JPY 1-hour Forex Chart

Economic data from the U.S. has all been in the green this week so I’m keeping a bullish dollar bias. As Pip Diddy mentioned, retail sales surpassed expectations and enjoyed upgrades, which suggests that consumers are in a spending mood ahead of the holiday sales. PPI and CPI numbers are still up for release and Yellen has a testimony lined up so a lot of volatility could come into play for the next couple of days.

As for the yen, the lack of top-tier data from Japan has left its currency trading on market sentiment. And unfortunately for the lower-yielding currency, risk appetite doesn’t seem ready to leave the financial markets anytime soon. If I do end up getting stopped out or closing my USD/JPY trade early, I’ll still be on the lookout for another chance to go long if the story stays the same next week.

As always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.

Risk Disclosure
Pipcrawler’s Q3 2016 Blog Trading Performance