Trade Closed: 2013-2-10 20:50 EST
It seems that I jumped in the trend too late on this one as the ascending trend line that I was watching broke quickly after my trade had triggered. But I guess it could’ve been worse… I was glued to my screen when the break happened, so I was able to exit early and minimize my losses.
Trade Closed at 92.86: -0.50%
Trade Idea: 2013-2-7 2:42 EST
I’ve already missed a good chunk of the rally on USD/JPY and I don’t want to miss it again! So here goes another try at jumping on a long trade.
I strongly believe that the trend is my friend. I plan on capitalizing on that by going long on a pullback on USD/JPY. On the hourly chart, we see that the pair could test the rising trend line for support. The area just above the 93.00 handle seems to be where the trend line, previous high, and Fibonacci levels coincide.
That being said, I’m setting a buy order at 93.20. My stop will be well below the trend line at 92.60. Should price tap this level, my trade idea would already be invalidated. As for my profit target, I plan on banking in half of my position at the most recent high at 94.00. The remainder I will leave open and make the most out of the rally.
Fundamentally, I think my trade also makes sense. For one, Japanese government officials have said in the past that they were comfortable with USD/JPY being in the 90.00 to 95.00 area. Price is currently at 93.20, which means it still has around 200 pips to go before hitting the government’s limit.
And two, the Bank of Japan (BOJ) has been pretty firm about their inflation target new inflation target of 2%. The central bank is being pushed by the Japanese government to do everything in their power to make sure that the inflation goal is achieved. This is yen bearish.
Of course, I can’t be certain how the trade will play out but I hope it goes in my favor. Let’s see if my analysis proves to be correct!
Long USD/JPY at 93.20, stop at 92.60, PT 1 at 94.00, PT to be determined. Risk disclosure
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