CHF/JPY has slowly gone my way since entry, but 112.50 seems to be a level the bears can’t seem to break. No matter where it goes next, here are a couple of adjustments to reduce risk & maximize gains.
Fundamentally, my original bias in favor of the Japanese yen over the Swiss franc still holds, especially with the latest Japanese PMI data showing that the manufacturing sector grew at its fastest pace in almost three years (53.5 in February). So, the outlook for growth continues to look positive for Japan, which could help support the yen in the short-term.
We’ve got major support forming around 112.50, a level that’s brought in the buyers three other times in the last couple of months, so despite the positive data, this might be the end of the bull run. But if it does break, I look to add to my position just below the recent swing low by entering another half position order to short at 112.00.
I’ve also already rolled down my stop to 114.50 to reduce my risk since the trade has gone my way, and if my additional orders get triggered, I’ll roll all stops down to my entry at 113.65 to reduce risk even further.
Looking forward, the data looks like until next week when we get a slew of Japanese data and Switzerland’s quarterly GDP. Until then, it could be all about price action for the pair unless we get a surprise geopolitical driver to spark up broad market volatility.
If you’re trading CHF/JPY with me, as always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.
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