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

Close Open Orders: 2008-08-18 11:23

USD/JPY continued to rally as traders pushed the pair up above 110.00 at the end of the week. I have decided to close my open orders to go long at 109.15 as a move that far below the current market may turn out to be a short term reversal.

Close open orders. No trade.

We have lots of data this week, and the biggest market mover could be Fed Chairman Bernanke’s speech on Friday on financial stability. Until then, the markets should have enough volatility to keep everyone on their toes with UK and Canadian Retail Sales, and Canadian CPI being the most prominent economic data of the week. So, stay tuned and if you’d like to talk more about USD/JPY, check out our USD/JPY Forums!

Trade Idea: 2008-08-14 19:58

PoD Chart

Tonight, it looks like USD/JPY may give traders another opportunity to play the current US Dollar strength. Will the pair retrace back to the rising trendline?

While US fundamentals are weak, Japan is experiencing its own troubles (falling exports, slowing growth, and inflation cutting down consumer spending). Analysts speculate the country is on its way to recession, and this makes it difficult for the BOJ to raise rates from 0.50%, giving the Greenback the positive interest rate advantage.

US weakness has been priced into currencies for sometime, and now that economic weakness is spreading across the globe, traders have been moving back into the US Dollar. How long will this last? I don’t know, but I look to go with the trend for now; hopefully on a dip.

So, idea is simple in that I’d like to go long at the rising trendline and possibly catch further US Dollar strength against the Japanese Yen.

Long USD/JPY at 109.15, stop at 108.60, pt1 at 109.70, pt2 at 111.15

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

We do have event risk in the upcoming US session, including: Empire Manufacturing, TIC Flows, Industrial Production, and U. of Michigan Confidence. I have adjusted my buy price on the possibility of event risk may bring above average volatility.

Stay tuned for updates and as I make adjustments. Good luck and good trading!