Hey, guys! Just wanted to update you on this long USD/JPY that I have.
A few days ago, I tweeted that I’m placing a buy order at 112.00 after looking at the daily chart.
Placing a buy order at 112.00! USD/JPY daily looks like it could still go down a bit but FOMO 😂 #forex
— HuckleKiwi Pip (@LoonieAdventure) October 12, 2018
As you can see below, the 112.00 psychological handle lines up with a 61.8% Fibonacci retracement and is just above the 100 SMA and the rising channel support on the daily chart.
The main reason that I’m buying, though, is that the Fed is still on track to raise its rates at least one more time this year and possibly thrice next year. Heck, recent speeches by Poloz and other voting FOMC members even hint that they’re not worried about the economy slowing down anytime soon.
At the time of my tweet, the dollar had already fallen sharply and I thought that short-covering ahead of the weekend would finally push USD/JPY higher.
This was why I placed a buy order at 112.00 even though the pair could technically find a deeper bottom. I placed my stop loss at 110.50, which is below the rising channel and 100 SMA support that I’m eyeing.
Fast forward to today and my trade is officially active! Here’s the plan:
Risked 0.50% at 112.00 with a 150-pip stop at 110.50.
Over the next couple of days I’ll be watching catalysts such as the U.S. bond yield movements, U.S.’ potential conflict with Saudi Arabia, and the upcoming EU Summit for clues on the dollar’s direction.
If USD/JPY breaks below the channel and I’m around to see it, then I’ll cut my losses early.
But if USD/JPY ends up finding support near the 100 SMA after all and extends its uptrend, then I might move my SL to breakeven as soon as it hits 113.00 and let the trade ride until a strong resistance pops up.
That’s it for me today! How about you? Got any open trades or setups you’re watching this week?
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