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It looks like my bias on the NFP number was pretty good, but I didn’t get the follow through reaction that I was hoping for.  Here’s how it went down.

Original trade idea: Short-term Breakout on USD/JPY

Before you move on, for those who are not familiar with my framework, signals, setups, or acronyms, please visit my discretionary trading framework blog.

USD/JPY 1 Hour Forex Chart Review
USD/JPY 1 Hour Forex Chart Review

As I mentioned in my original trade idea that I thought the probability for a weaker-than-expected number was a bit better than not, and that’s exactly what we got from Friday’s weak U.S. Jobs report!

It was much weaker-than-expected at 113K, and as I had hoped, the market dropped lower and triggered my short position at 101.80.  Unfortunately for me, buying support was strong at 101.50 and it was an easy move higher from there.

Apparently, the market priced in the idea that because it was weak, we’ll get dovish remarks from new Fed Chairwoman Janet Yellen this week, which possibly means a hold on future Tapering? This was bullish for risk taking, which means traders were selling the Japanese yen against higher-yielding currencies.

I let the trade ride into the weekend as I was already close to my stop on a really small position; the risk-to-reward at that point made it worth holding onto in case there was a gap lower at the open.  Unfortunately for me, the market gapped higher and took me out at my stop, 102.60

Total: -80 pips/ -0.25% loss

A really small loss to start the week, which I was pretty quick to shake off.  I actually think with data around the globe starting to look weak, I think this area might be an even better price to start buying back some yen in case risk-off sentiment picks up again.

For now, I’ll stick to longer-term trades and maybe wait for Yellen to address Congress tomorrow.  Stay tuned by following me on Twitter and Facebook!


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