Pick of the Day: USD/JPY – Trade Closed

Trade Closed: 2008-07-28 09:31

A little bit of volatility at the open of trading this week momentarily popped up USD/JPY above 108.00 and took us out at our stop.

Total: -100 pips/ -1.0%

Kind of a bummer as USD slowly started to sell off as the Asia trading session opened up and treaded lower to its current levels around 107.60.

It looks like a hodge podge of data scheduled this week, but traders will be cautious in putting money to work ahead of the US Non-Farm Payrolls set to be released this Friday. Until then, I will look for shorter term trades.

So, we took a small hit at the beginning of the week on some noise, but let’s see if we can earn some back and then some throughout the rest of the week. Good luck and good trading!

Trade Update: 2008-07-24 10:36

We’re still in this one as USD/JPY failed to reach 108.00, missing out stop out trigger by a few pips. US Employment and Housing data came out a weaker than expected on both fronts with Initial Claims falling in at 406K and Existing Home Sales reading at 4.86M.

The USD sold off after the Existing Home Sales data, but it looks like that was only temporary as USD/JPY found buyers around 107.50 shortly after.

I am still in this trade, but it looks like the choppiness will continue for the rest of the week. Keep a watch on oil prices and comments from US officials to push global markets in the short term. Stay tuned for updates and good luck!

Trade Update: 2008-07-22 10:06

We were looking good through a quiet Asian and European trading session as the pair reached as low as 106.05, 5 pips from our first profit target. Well, that’s before the US Dollar and risk appetites grew as the morning US session opened up. Weakness in oil and speculation that the Fannie/Freddie bill will pass sparked the Greenback and US equities, bringing our trade back to square one.

Is this a sentiment changer? Maybe things get better from here? Well, it’s good for US financial system that the GSE’s do not fail, but what happens in the US in the longer term? If the bill passes the US takes on $5 trillion in mortgage risk, increasing the debt, making US assets look very unattractive in the long run.

I think in we will see the US Dollar continue to rally from here, but it will only provide opportunities for traders to position Dollar short for the longer term. I’m going to hold onto this trade for now and see if the falling trendline holds. Good luck!

Trade Idea: 2008-07-21 10:12

PoD Chart

Good morning! We have a purely technical trade idea to start off the week. It looks like a slow week event wise for both the US Dollar and the Japanese Yen, so technicals may play out nicely.

On the chart, we can see USD/JPY hitting a falling trendline in which it has met resistance and fallen previously. Stochastics have already been well into overbought territority, indicating the bulls may not have the legs to push it up any higher. Will the sellers take over once again?

Fundamentally, it is going to be a slow week until about Thursday where we see the housing data from the US and Japanese inflation data. Friday is packed with US news such as Durable Goods, more housing data, and consumer sentiment. Until then, technicals may play out. Also, oil is on the rise once again on the talks with Iran haven’t gone much anywhere this weekend. A continued rise in oil could put pressure on the Greenback.

So, I think last week’s rally may be a great opportunity to play the longer term bearish US Dollar sentiment. I’m going to:

Short USD/JPY at market (107.00), stop at 108.00, pt1 at 106.00, pt2 at 104.00

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

Good luck and good trading!

  • shirley

    hi am new at this, so wat advice this week in simple words, should we do short term trading? shirley

  • Pipcrawler

    Welcome to Forex and BabyPips.com Shirley… by your question, I’m assuming this is the first time in which you have checked out our blogs. The best way to understand the analysis is to first check out our lessons by clicking on the “School” tab up top. Going through the school can shorten your learning curve in this business… check it out!

  • shirley

    hi am new at this, so wat advice this week in simple words, should we do short term trading? shirley

  • Pipcrawler

    Welcome to Forex and BabyPips.com Shirley… by your question, I’m assuming this is the first time in which you have checked out our blogs. The best way to understand the analysis is to first check out our lessons by clicking on the “School” tab up top. Going through the school can shorten your learning curve in this business… check it out!

  • -Conan-

    Wow. I’m relatively new to forex, only having followed the market for about 3 weeks now, and I’m impressed at just how right you were. I got into the trade pretty late, but I will definitely be subscribing to your blogs from now on. Cheers. :)

  • -Conan-

    Wow. I’m relatively new to forex, only having followed the market for about 3 weeks now, and I’m impressed at just how right you were. I got into the trade pretty late, but I will definitely be subscribing to your blogs from now on. Cheers. :)

  • Babysteps

    Hello pip,
    I’m in @107.75

  • Babysteps

    By the way pip
    What’s the reason for 40min chart not 30 or 1H?
    Could you plz Share the way to do that?

  • Pipcrawler

    Thanks for the comments everyone! Babysteps…it’s a 240 min (4hr) chart…. the “2” is getting lost in a red candle… sorry about that haha!

  • Babysteps

    Hello pip,
    I’m in @107.75

  • Babysteps

    By the way pip
    What’s the reason for 40min chart not 30 or 1H?
    Could you plz Share the way to do that?

  • Pipcrawler

    Thanks for the comments everyone! Babysteps…it’s a 240 min (4hr) chart…. the “2” is getting lost in a red candle… sorry about that haha!

  • enochbenjamin

    Pip – are you still in this trade? I have noticed that the pair is hesitant to cross the 108 threshold, and has been trading in a 40pip range for the past 24 hrs.

  • Pipcrawler

    Hey I’m still in this one enochbenjamin… Housing and employment data gave us a little boost away from our stop loss point…let’s wait and see what happens…

  • Babysteps

    I’m still but have question
    IF eur/usd and gbp/usd Keep droping I suppose usd/jpy maybe raise, right?
    If that true we should close this trade, What do u think??

  • Pipcrawler

    Because of the USD component, they do have a bit of negative correlation, so it’s a possibility that if EUR/USD drops, then USD/JPY rises… One thing I like to practice if I am in an uncomfortable losing position is to scale out. I reduce my risk by taking a bit off of the table, and if my trade goes my way later I’ll add more…just a thought….

  • enochbenjamin

    Pip – are you still in this trade? I have noticed that the pair is hesitant to cross the 108 threshold, and has been trading in a 40pip range for the past 24 hrs.

  • Pipcrawler

    Hey I’m still in this one enochbenjamin… Housing and employment data gave us a little boost away from our stop loss point…let’s wait and see what happens…

  • Babysteps

    I’m still but have question
    IF eur/usd and gbp/usd Keep droping I suppose usd/jpy maybe raise, right?
    If that true we should close this trade, What do u think??

  • Pipcrawler

    Because of the USD component, they do have a bit of negative correlation, so it’s a possibility that if EUR/USD drops, then USD/JPY rises… One thing I like to practice if I am in an uncomfortable losing position is to scale out. I reduce my risk by taking a bit off of the table, and if my trade goes my way later I’ll add more…just a thought….

  • LTN7

    bearish signal generated. will be shorting from 10695-10715 with SL @ 10730..

  • LTN7

    bearish signal generated. will be shorting from 10695-10715 with SL @ 10730..

  • Babysteps

    Is this my bad luck or what!!
    I left the trade to sleep and come back to find it back to 107.72!:-(
    Plz pip make update, Do u think it will pass R1 or 108.00?

  • Pipcrawler

    Yeah, looks like we all caught a bit of bad luck as buyers were ready and waiting at 106.60 to jump in. I don’t know if 108.00 will be hit Babysteps…that’s up to the market. All we can control is our risk….but by the looks of things, sellers are in control of 107.90. We may not see 108.00 and maybe even get a pull back to 107.50 – 107.60 before the end of the day…I may close out a part, or all, of my position and move on before the end of the day, so stay tuned…

  • Babysteps

    Is this my bad luck or what!!
    I left the trade to sleep and come back to find it back to 107.72!:-(
    Plz pip make update, Do u think it will pass R1 or 108.00?

  • Pipcrawler

    Yeah, looks like we all caught a bit of bad luck as buyers were ready and waiting at 106.60 to jump in. I don’t know if 108.00 will be hit Babysteps…that’s up to the market. All we can control is our risk….but by the looks of things, sellers are in control of 107.90. We may not see 108.00 and maybe even get a pull back to 107.50 – 107.60 before the end of the day…I may close out a part, or all, of my position and move on before the end of the day, so stay tuned…

  • paul007

    Hi, i like reading your USD/JPY update. If the USD/JPY do not cross the 108 line, what is your next move next week?

  • paul007

    Hi, i like reading your USD/JPY update. If the USD/JPY do not cross the 108 line, what is your next move next week?

  • pakiestra

    The next move (during this week with end of the month volatility cpoming up) is to test 109-110. The 108 defence line is a history as for now…Think 108.20 could be good level for some shorts (stop 108.50) TP 107.70 for now.

  • paul007

    USDJPY trade close at 108. No luck for me. How? Are you still holding.

  • Pipcrawler

    Boo… I was taken out at the market open as well.

  • pakiestra

    The next move (during this week with end of the month volatility cpoming up) is to test 109-110. The 108 defence line is a history as for now…Think 108.20 could be good level for some shorts (stop 108.50) TP 107.70 for now.

  • paul007

    USDJPY trade close at 108. No luck for me. How? Are you still holding.

  • Pipcrawler

    Boo… I was taken out at the market open as well.