Seems like USD/JPY bulls are hiding ahead of the Fed’s much-awaited event. Time to lock in some profits!
If you’ve just tuned in, you should know that a few weeks ago I risked 0.50% of my account to jump on USD/JPY’s uptrend.
While 110.10 was not the perfect entry, I banked on the dollar being the “cleanest shirt in the laundry pile” to push USD/JPY’s trend higher.
Fast forward to today and USD/JPY’s rally is contained by the 111.70 mark even as it finds support at the 100 SMA on the 4-hour chart.
It also doesn’t help that analysts are expecting the Fed to be a bit less hawkish than they were earlier this year.
Aside from expecting the Fed’s “dot plot” to reflect fewer rate hikes, some also see Governor Powell and his team downgrading their economic forecasts and justifying their call for “patience” by pointing out the downside risks to the economy.
This is why I’ve decided to adjust my stops to 110.15. The level is below the 100 SMA and mid-channel support, so I think it should be enough in case we do see volatility during the Fed’s event.
It’s a waiting game for me from here! I now have a risk-free trade, but my fingers are still crossed that traders will focus more on the Fed’s optimism!
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.