Pick of the Day: USDJPY – Close Open Orders

Close Open Orders: 2009-06-04 21:45

Good evening! It looks like USDJPY did not go my way as the pair broke out to the upside. I have decided to close my entry orders, especially as we head into US jobs data.

Close open orders. No trade.

US employment data often causes fast market action and spreads to widen, so please be very cautious executing trades around its release time. For newbies, it is often best to stay away until you gain more experience.

Market expectations are for another 500k+ jobs lost. While the headline number is important, the revisions can be just as market moving. Be aware and good luck!

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Trade Idea: 2009-06-03 10:06

PoD Chart

Good morning! I’ve spotted a nice little chart pattern on USDJPY the may lead to a breakout opportunity. Will we see volatility once again before the end of the week?

That may be the case as price action in USDJPY has been consolidating over the past few days, forming a symmetrical triangle. This chart pattern often is a signal of a potential breakout as traders wait on the sidelines and will potentially re-enter the market after a significant event.

And what could that event be you ask? US employment data this Friday!

Yes, the big dog of economic events is out this Friday, and after seeing ADP Payrolls report 532k jobs in the private sector cut this morning, we may see another disappointing number and continued rise in unemployment rates in the US. This outcome could bring about a new round of risk aversion. Couple that with some profit taking after the monstrous runs we’ve seen in risk appetites, this could lead to a breakout lower in USDJPY.

If this does take place, I look to short below the rising trendline drawn on the chart and below that area of minor consolidation. We may see some minor support at the areas drawn with the blue line, around 94.50, but I am going to target 94.00 and beyond. Here’s what I am going to do:

Short USDJPY at 95.25, stop at 96.50, pt1 at 94.00, pt2 at 92.50

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

If my orders have not been triggered by the time we do see NFP data on Friday, I may remove my orders to avoid slippage that fast market conditions can bring. Stay tuned!

14 comments

  1. matouka

    This is a great site guys. Well Done!!

    As a noobie I have a, no doubt, stupid question.

    Why have you decided that this trade is going to break out in a negative direction?

    I was under the impression that a Pennant was considered a continuation signal, and it looks like this just turned to the upside before making this formation? Could a straddle trade be used here?

    Cheers.

    Reply
  2. matouka

    This is a great site guys. Well Done!!

    As a noobie I have a, no doubt, stupid question.

    Why have you decided that this trade is going to break out in a negative direction?

    I was under the impression that a Pennant was considered a continuation signal, and it looks like this just turned to the upside before making this formation? Could a straddle trade be used here?

    Cheers.

    Reply
  3. pipsprof.

    Hello everyone, This currency pair is definitely heading North.So this is what i did, Long UsdJpy 96.50 Stop 95.00 Tp1,98.00 Tp2.100.00, I reached this conclusion after the pair broke out upwards of its symmetical triangle formation on the H4 chart.Also stocks are doin well again favouring the Usd,and d Japanese want a weaker currency to improve thier export oriented economy.Also and very importantly,this pair has just successfully closed above its H4 200 EMA.I hope we all win,thanks Mr.Pipscrawler,I learnt a great deal from you.

    Reply
  4. pipsprof.

    Hello everyone, This currency pair is definitely heading North.So this is what i did, Long UsdJpy 96.50 Stop 95.00 Tp1,98.00 Tp2.100.00, I reached this conclusion after the pair broke out upwards of its symmetical triangle formation on the H4 chart.Also stocks are doin well again favouring the Usd,and d Japanese want a weaker currency to improve thier export oriented economy.Also and very importantly,this pair has just successfully closed above its H4 200 EMA.I hope we all win,thanks Mr.Pipscrawler,I learnt a great deal from you.

    Reply

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