Pick of the Day: USD/JPY – Close Open Orders

Close Open Orders: 2008-06-12 10:24

The Greenback continued to push higher on a broad base through the Asian and European session with no retracement. This has taken USD/JPY far and away from our long orders at 105.80, so I have decided to close those orders and look for opportunities else where.

Close open orders. No trade.

Trade Idea: 2008-06-11 18:28

PoD Chart

Good evening! It’s time to meet up with an old friend, the “trend,” today as the Greenback continues to power higher on the US interest rate outlook.

With a quick glance at the chart, we can see the pair steadily rising over the past few weeks, and with Bernanke’s comments on the Fed’s stance on inflation, the Greenback took a boost higher in the past couple of trading days. Today, the pair took a hit as commodities pushed down equities and created a bit of risk aversion in the markets, but this may prove to be an opportunity to ride the trend higher at a better price.

I’ve drawn a Fibonacci retracement tool on the chart, and it appears that the 50% – 61% Fibonacci retracement level seems to line up with the 106.00 area. You know how I like to play round numbers, so I will short just below 106.00 with a stop at 105.30. My ultimate target is the previous high, around 107.70, but I may change to a trailing stop if momentum is strong to the upside.

Long USD/JPY at 105.80, stop at 105.30, pt1 at 106.30, pt2 at 107.70

Remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.

We do have US retail sales data tomorrow, which is expected to be better than last month’s numbers (probably due to inflation). If they come inline or better, that should do well for our trade, and any surprise of weakness in retail sales may send the pair lower and dampen hopes of a rate hike for the Dollar bulls. I may close any open orders or open positions just before that data is released at 1230 GMT tomorrow. Stay tuned, good luck and good trading!

On a side note…Don’t forget to check out Freshpips.com! Forex news picked by Forex traders! Let’s help each other out find what moves the markets…See ya there!

  • pakiestra

    That’s quite an interesting set up Pipcrawler. A few “buts”, USD/JPY didn’t manage clearly break big resistance line at 107.50 (drawn from Oct 2007 top after August breakdown when shoes started to fall off), so any reason for such a big strenght in USD now ? As far as the rate stance is concerned -there is a tug war going on it between the two gents, none is gonna to win: inflation is everywhere so the slowdown, question is: who’s gonna bleed more ? which currency is a safe heaven ?. I wouldn’t take US retail sales data blindly – they are not inflation adjusted -heavy gas price will boost it but what is the real value ? Did it rise after tax rabate ? It remains to be seen. All in all I will nibble on this trade with half of the normal size only to re-test the resistance level once again, but who knows at the end of the day.

  • enochbenjamin

    I think you mean you will go long

    “so I will short just below 106.00 with a stop at 105.30.”

  • pakiestra

    That’s quite an interesting set up Pipcrawler. A few “buts”, USD/JPY didn’t manage clearly break big resistance line at 107.50 (drawn from Oct 2007 top after August breakdown when shoes started to fall off), so any reason for such a big strenght in USD now ? As far as the rate stance is concerned -there is a tug war going on it between the two gents, none is gonna to win: inflation is everywhere so the slowdown, question is: who’s gonna bleed more ? which currency is a safe heaven ?. I wouldn’t take US retail sales data blindly – they are not inflation adjusted -heavy gas price will boost it but what is the real value ? Did it rise after tax rabate ? It remains to be seen. All in all I will nibble on this trade with half of the normal size only to re-test the resistance level once again, but who knows at the end of the day.

  • camelman

    Pak, I think the dollar have momentum now and thats the main reason its going up. With so many “Buts” around the dollar, its amazing that it went from the 90’s to the level its in right now. If the retail sales comes out bad tomorrow it will affect the dollar for a day or two but seeing the amount of “advertising” Bernanke is making for the dollar, it will keep going up …. for a while at least.
    enochbenjamin, I think pipcrawler meant go long at 105.80 not short.
    Happy Trading

  • enochbenjamin

    I think you mean you will go long

    “so I will short just below 106.00 with a stop at 105.30.”

  • demontez

    My own contribution to this topic. Is i will warn on any currecy pair with the USD. As it clearly can see that the dollar is on a strong momentum or rather on a recovery.As camelman said if the retail sales comes out negaive it might just have an effect on dragging the current price on this pair to our entry level of 105.80. So if i was going to go against the trend now i will short my position when the news on the retail sales depending on the outcome is about to be realised with a profit point at 105.80. So that you can utilise but gain from two part of the sword. That is my view.

  • camelman

    Pak, I think the dollar have momentum now and thats the main reason its going up. With so many “Buts” around the dollar, its amazing that it went from the 90’s to the level its in right now. If the retail sales comes out bad tomorrow it will affect the dollar for a day or two but seeing the amount of “advertising” Bernanke is making for the dollar, it will keep going up …. for a while at least.
    enochbenjamin, I think pipcrawler meant go long at 105.80 not short.
    Happy Trading

  • demontez

    My own contribution to this topic. Is i will warn on any currecy pair with the USD. As it clearly can see that the dollar is on a strong momentum or rather on a recovery.As camelman said if the retail sales comes out negaive it might just have an effect on dragging the current price on this pair to our entry level of 105.80. So if i was going to go against the trend now i will short my position when the news on the retail sales depending on the outcome is about to be realised with a profit point at 105.80. So that you can utilise but gain from two part of the sword. That is my view.

  • demontez

    Pip,
    You are still the man of forex. I had a gut instinct that the dollar is on a strong momentum regardless of any negative news out there.This is due to the fact that bernanke has changed the tone to focus on inflation hence looking at curb any further interest rate. So any currency pair with the USD has to be watched very closely. But please can you tell me where this USD/JPY is climbing up to. the momentum is just too much.Thanks for this blog.

  • demontez

    Pip,
    You are still the man of forex. I had a gut instinct that the dollar is on a strong momentum regardless of any negative news out there.This is due to the fact that bernanke has changed the tone to focus on inflation hence looking at curb any further interest rate. So any currency pair with the USD has to be watched very closely. But please can you tell me where this USD/JPY is climbing up to. the momentum is just too much.Thanks for this blog.