Trade Closed: 2007-01-18 07:50:00
As expected, USD/JPY did rally after the Bank of Japan decided to keep rates at 0.25%. Unfortunately for our trade, the pair didn’t find resistance right at our stop, around 121.40. It looks like the fundamental aspect outweighed the technical aspect of the trade and we took a small -40 pips loss for it.
Total: -40 pips
So, we look to the US trading session coming up soon for a trade in which CPI may give us an opportunity. Stay tuned for new updates!
Traders having been waiting and we finally have a verdict: Bank of Japan keeps rates at 0.25%! This wasn’t a shocker actually as recent data gave the BoJ less and less of a reason to hike rates. Market reaction in USDJPY was limited to a little bit of whipsaw action, but I think we’ll see we will continue to see the pair trend higher because of strong US fundamentals and the attractive interest rate differential in this pair.
This upward move may be limited as soon as the pair approaches the psychological level of 121.00. If it does touch that level, we will look to short and hopefull catch a retracement in this pair.
We do have even risk tomorrow morning with the US Consumer Price Index and Housing Starts set to be released at 8:30 am EST. Please check in before then for a possible trade adjustment to protect ourselves from event risk. Here’s a short trade idea:
Good luck and good trading!