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Close Trade: 2008-09-04 14:20

We saw a nice run down in USD/JPY today as the pair took a hit on risk aversion and weak initial claims numbers. The pair seems to find support just above 107.00, and with the close of the US session approach, it looks like we won’t see much movement from here. With US Non-Farm payrolls just around the corner, I have decided to close this trade down and bank some pips ahead of major event risk.

Close remaining position at market (107.12).

1st half: +100 pips
2nd half: +188 pips
Total: +1.44% gain

Stay tuned for thoughts and new ideas after the NFP report! USD/JPY Forums
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Trade Adjustment: 2008-09-04 00:00

It took a bit of time, but my first profit target was hit at 108.00 and half of my trade was closed out to lock in some pips. Time for some adjustments.

Half position closed at 108.00 to lock in +100 pips. Adjusting stop on remaining position to breakeven at 109.00 to create a risk free trade.

We’ve got plenty of data coming up with ECB and MPC interest rate decisions to shake up the currency markets. I plan on keeping this trade open now that it’s risk free, and if USD/JPY does make it to 107.00, I plan to trail my stop and leave the position open to ride it lower. Stay tuned!

Trade Update: 2008-09-03 09:38

My short trade was triggered just before the European trading session open, and the Greenback quickly fell against the Yen to hit a low around 108.45. At the moment, the US Dollar is falling across the board, and it looks like USD/JPY could make a run for the first profit target by the end of the day.

I look to hold onto my position for now. If I’m still in the position by Friday, I may cut it off ahead of the US Non-Farm Payrolls report. Stay tuned!

Trade Idea: 2008-09-02 23:05

PoD Chart

I’m checking out a potential technical setup in USD/JPY that is currently happening in the 4hr time frame. Could we see the pair react to the trendline and resume the short term downtrend?

It’s a simple idea really. On the chart, I drew a trendline to mark the lower highs in price action. With the market making its way higher towards potential resistance, will we see it hold? Also, we may have a hidden bearish divergence signal as the pair makes lower “highs” in price, while the stochastic indicator is making a higher “high.”

Fundamentally, the Greenback has been rallying on the sentiment the US is going to do better than the rest as the global credit crisis works itself out. It’s had it’s best month of the year in August, so will we the rally lose some steam? I’m not sure, but in the short term, the Greenback is slowly trending lower against the Yen. No major out of Japan today, nor in the US until late morning. I think technicals may play out until we see the US factory orders and Beige book data. I am going to:

Short USD/JPY at 109.00, stop at 110.00, pt1 at 108.00, pt2 at 107.00

Remember to never risk more than 1% of a trading account on any single trade. Always adjust position sizes accordingly.

Stay tuned, good luck, and good trading!

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