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What’s more annoying than being on the wrong side of a weekend gap? Why, the gap not filling, of course! After days of trading without USD/JPY closing its weekend gap, I’ve chosen to trade another day by closing this position.

Original Trade Idea: USD/JPY to Extend its Downtrend?

Last week I told you guys that I put a short USD/JPY order at 110.00 because it lined up nicely with the falling trend line, Fibonacci retracement, and SMAs on the 4-hour time frame.

Fundamentally, I was also crossing my fingers that adjustments from Fed rate hike expectations and weaker-than-expected U.S. reports would keep the Greenback’s momentum going for the next couple of days or weeks.

USD/JPY 4-Hour Forex Chart
USD/JPY 4-Hour Forex Chart

Unfortunately (for my trade, at least), France’s weekend elections put investors in such a good mood that the yen gapped lower across the board.

The gap triggered my order, which I guess wasn’t a bad thing. What’s bad is that my order got triggered just as the dollar’s selloff and the yen’s strength was petering out.

I waited and see if the dollar’s selloff would pick up again. I was really tempted to take my position around 109.80 when the pair hit a previous resistance area of interest, but decided to grin and bear it until Trump announces his tax plans and the BOJ publishes its monetary policy decision.

When USD/JPY STILL didn’t move lower after the events, I decided to cut my losses and just enter another position. For now, my original trade idea had been invalidated and the trade warranted closing.

I ended up closing the trade at 111.25 and got away with a 125-pip loss (-0.12%) instead of the full 0.25% risk that I originally planned.

Guess I’ll have to enter a trend at an earlier point next time!

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