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Trade Closed: 2008-07-28 09:31

A little bit of volatility at the open of trading this week momentarily popped up USD/JPY above 108.00 and took us out at our stop.

Total: -100 pips/ -1.0%

Kind of a bummer as USD slowly started to sell off as the Asia trading session opened up and treaded lower to its current levels around 107.60.

It looks like a hodge podge of data scheduled this week, but traders will be cautious in putting money to work ahead of the US Non-Farm Payrolls set to be released this Friday. Until then, I will look for shorter term trades.

So, we took a small hit at the beginning of the week on some noise, but let’s see if we can earn some back and then some throughout the rest of the week. Good luck and good trading!

Trade Update: 2008-07-24 10:36

We’re still in this one as USD/JPY failed to reach 108.00, missing out stop out trigger by a few pips. US Employment and Housing data came out a weaker than expected on both fronts with Initial Claims falling in at 406K and Existing Home Sales reading at 4.86M.

The USD sold off after the Existing Home Sales data, but it looks like that was only temporary as USD/JPY found buyers around 107.50 shortly after.

I am still in this trade, but it looks like the choppiness will continue for the rest of the week. Keep a watch on oil prices and comments from US officials to push global markets in the short term. Stay tuned for updates and good luck!

Trade Update: 2008-07-22 10:06

We were looking good through a quiet Asian and European trading session as the pair reached as low as 106.05, 5 pips from our first profit target. Well, that’s before the US Dollar and risk appetites grew as the morning US session opened up. Weakness in oil and speculation that the Fannie/Freddie bill will pass sparked the Greenback and US equities, bringing our trade back to square one.

Is this a sentiment changer? Maybe things get better from here? Well, it’s good for US financial system that the GSE’s do not fail, but what happens in the US in the longer term? If the bill passes the US takes on $5 trillion in mortgage risk, increasing the debt, making US assets look very unattractive in the long run.

I think in we will see the US Dollar continue to rally from here, but it will only provide opportunities for traders to position Dollar short for the longer term. I’m going to hold onto this trade for now and see if the falling trendline holds. Good luck!

Trade Idea: 2008-07-21 10:12

PoD Chart

Good morning! We have a purely technical trade idea to start off the week. It looks like a slow week event wise for both the US Dollar and the Japanese Yen, so technicals may play out nicely.

On the chart, we can see USD/JPY hitting a falling trendline in which it has met resistance and fallen previously. Stochastics have already been well into overbought territority, indicating the bulls may not have the legs to push it up any higher. Will the sellers take over once again?

Fundamentally, it is going to be a slow week until about Thursday where we see the housing data from the US and Japanese inflation data. Friday is packed with US news such as Durable Goods, more housing data, and consumer sentiment. Until then, technicals may play out. Also, oil is on the rise once again on the talks with Iran haven’t gone much anywhere this weekend. A continued rise in oil could put pressure on the Greenback.

So, I think last week’s rally may be a great opportunity to play the longer term bearish US Dollar sentiment. I’m going to:

Short USD/JPY at market (107.00), stop at 108.00, pt1 at 106.00, pt2 at 104.00

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

Good luck and good trading!

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