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Close Trade: 2008-21-15:45

What’s up everyone! It’s the end of the week and as we see risk tolerance grow this afternoon I have decided to close my trade out to avoid weekend event risk.

Close open position at market (95.65).

1st Half: +200 pips
2nd Half: +85 pips
Total: +0.71% gain

This late rally is most likely due to US President-elect Obama announcing his candidate for the US Treasury Secretary and that he may announce his economic team on Monday. This brings a bit of confidence to the markets, but I don’t think it’ll last especially as we head into the holiday week in the US. I remain short bias for now and I may jump back in short on this pair next week.

Stay tuned and have a great weekend!

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Trade Adjustment: 2008-11-20 09:40

Finally seeing some action in the currency markets, and after another disappointment in US initial claims, USD/JPY fell this morning and hit my first profit target at 94.50. Half my position is closed and it’s time to make some adjustments.

Half position closed at 94.50 to lock in profit. Adjusting stop on remaining position to breakeven at 96.50 to create a risk free trade. Will trail stop by 200 pips from here on out.

So, more bad news as usual, so I’m sticking with the “risk aversion” theme for now. Stay tuned!

Trade Update: 2008-11-19 13:50

Good afternoon! Since I posted my ideas on USD/JPY, my trade was triggered but price action has been a big snoozer since then. Traders have kept the pair in a range between 96.00 to 98.00, even after US data jolted the sleepy currency markets this morning.

I still plan on holding onto my trade. Even though we haven’t seen a massive breakout, I still like a short on this trade as economic conditions continue to worsen. Today’s data is another example of weakening conditions as housing data continues to be weak and a drop in CPI doesn’t help the interest rate outlook at all. It’s not until housing turns that my outlook on risk will change, and it seems that will not happen for a while.

So, stay tuned for updates and hopefully adjustments (if this market ever moves). Hehe.

Trade Idea: 2008-11-17 20:20

PoD Chart

Greetings! Looks like I’m going to start out my week with a technical setup on USD/JPY. Check it!

On the one hour chart, USD/JPY is forming a familiar technical setup. The pair looks like it’s breaking lower out of a symmetrical triangle, possibly returning to the downside. Volatility has been waning at the end of last week and this week, which means we may see a breakout soon.

The catalyst for the breakout may kick in tomorrow as we see economic data from the US along with testimony from Federal Reserve Chairman Bernanke and US Treasury Secretary Paulson to Congress on the TARP program. We will probably see more weak economic data which may continue to drag down risk tolerance and the Greenback against the Yen.

So, the technical setup is lining up with the trend, sentiment, and fundies which makes for a good looking trade. Here’s what I’m going to do:

Short USD/JPY at 96.50, stop at 98.50, pt1 at 94.50, pt2 at 92.50

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

Stay tuned!

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