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Close Trade: 2008-06-03 15:20

Looks like I’m going to have to shut this trade down as Bernanke’s comments has signaled an end to the rate cuts and the Fed’s focus on the US Dollar weakness. This should support the Greenback, at least in the short term, which doesn’t bode so well for our trade.

Close short USD/JPY at market (105.00).

Total: -100 pips/ -0.50% loss

Trade Update: 2008-06-02 08:45

We have been holding onto this trade for a little over a week now, and after being unable to break resistance near 105.70 (and stopping us out), the pair has fallen today on risk aversion.

It appears risk aversion is on play today after Bradford & Bingley Plc, the U.K.’s biggest mortgage lender to landlords, said it needs to raise more capital because of “widening bad-debt provisions.” So, more credit concerns has brought risk appetites down, including carry trades.

USD/JPY is back below 105.00, and with the economic calendar pretty full this week, we may see a further decline if data continues to weak. I will hold onto continue this position and closely watch this weeks data.

Stay tuned and good luck!

Trade Idea: 2008-05-22 11:42

PoD Chart

It looks like the market is giving us another opportunity to short USD/JPY again as the Greenback finds some legs after today’s positive US initial claims data.

While we saw positive US data today, I still feel that the economy has a long way to go before we see any kind of improvement from the fallout of the credit crunch. According to the FOMC meeting minutes, the Fed agrees with me and I think traders will be short bias on the Greenback for sometime to come, even if the Fed rate increases have stopped.

I used a Fibonacci retracement tool to find possible resistance points, and I like the 104.00 area as it lines up with the 50% Fibonacci retracement level. I’m going to short at market (104.00). I’m also going to make this a longer term trade with wider stops, and adding trailing stops if we hit our first profit target.

Short USD/JPY at market (104.00), stop at 106.00, pt1 at 102.00, pt2 at 100.00

Remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.

Stay tuned to updates, good luck, and good trading!

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