Update: 2007-02-01 10:20
As expected, Dollar sentiment continued to be bullish in USD/JPY, but instead of retracing after the strong move down to 120.50, it continue south as low as 120.10. We just saw the ISM Manufacturing Index numbers out at 49.3, which was expected after all of the regional surveys came out lower than expected as well.
As for our trade, because the pair did not retrace up we will cancel all open orders. A move up all the way to 121.10 would mean a change in dollar sentiment, and we wouldn’t want to be caught short then.
Trade Idea: 2007-01-31 23:55
It’s a new month, and a new chance to hit the ground running. Today was action packed as we saw tons of data coming out of the US. Some good and some bad, and it looks like the market took it mostly bad as the Greenback trended lower through out the US trading session.
I see a weaker sentiment on USD after the Fed’s comments and a weaker Chicago PMI. Regional manufacturing surveys have been week as of late, we have a few traders forecasting a weak ISM Manufacturing Index number. Along with ISM data, we will see the release of the Core PCE Price Index number – the Federal Reserve’s preferred consumer inflation indicator.
Technically, USD/JPY has been in a short term down trend. I’m looking for a short trade, but i’d like to see if the pair retraces back up. Here’s a trade idea:
Short USD/JPY at 121.10, stop at 121.40, pt1 at 120.90, pt2 at 120.55.
Remember to never risk more that 1% of your account on any single trade, so please adjust your position sizes accordingly.
Good luck and good trading!