And I’m in! I was a bit late in catching the downside break, but I think I can still bag a pretty decent return-on-risk with this one.
Short GBP/JPY Trade
I remember mentioning in my trade idea post that I planned on hopping in around 146.00 to catch a neckline break, but that drop was so fast and my monster fingers were unable to keep up!
I didn’t want to pass up the chance to take a short position on this pair, though, as technicals and fundamentals still seem to be lined up neatly for more declines.
I did wait for a tiny pullback on the short-term time frames before hopping in (so I wouldn’t feel too bad about being late!) and I was able to short when the 145.00 level held as resistance.
I’m still aiming for the next support zone around 138.00 with my stop past the 150.00 handle. This gives me a 1.2-to-1 R:R, which still ain’t so bad. Besides, I could still add to my position if another round of bearish GBP catalysts materialize or if it pulls up to a much better selling price.
As it is, sterling traders are currently dismayed by the latest U.K. CPI miss and are still wary of Brexit concerns. On the other hand, the yen could see more safe-haven demand as the political tension in Italy remains unresolved while a potentially weak NFP could channel risk-off flows away from the dollar and onto the Japanese currency.
What do you guys think?
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