After a very nice slide, Yen seems to be finding some legs. Some people claim it is related to the new stimulus package announced by the Japanese government. I’m not entirely sure of that, yen pairs have been a little overextended, especially smaller time frame, like hourly. On the other hand, moves need a catalyst, so perhaps the stimulus news did just that. Details will be unveiled on Friday, but it is expected to be at least $100 Billion. They want spend more than 2 per cent of GDP, taking into account a fall in Japanese economy, which is bigger than other leading nations. Hit by plunging global demand and weak consumption at home, Japan’s export-reliant economy shrank 3.2 per cent in the fourth quarter, its fastest decline since the 1974 oil crisis and twice as fast as the U.S. and euro zone economies. BoJ is in the middle of its 2-day policy setting meeting. With rates pushing 0%, it remains to be seen what else will they do to revive shrinking economy. Probably another initiative to purchase more commercial paper and maybe corporate bonds. Similar to what FED and BoE are doing.
Last post included a brief discussion of follow up trend, after the weekend and was JPY oriented. We did have continuation of Friday trends, before reversal. I took one trade at the open, buy in EUR-JPY, with a small objective of 80 pips. Turned out good. I’m going to wait till tomorrow, after the BoJ press release, to do any Yen analysis. Would like to see more downside moves, so I can start buying again, but have to wait and see what happens.
Here is my EUR-JPY trade.
Markets moved more that I thought they would, but 80 pips is 80 pips and I’m content with it. New order presented yesterday, in GBP-AUD, has not been triggered, and remains valid.
One of the trades from last week, EUR-GBP short, was closed today.
Trade was exited couple of hours ago, for a gain of about 70 pips. I used 4H chart for this trade. Looks like price is stalling somewhat, so I’ll follow this pair from now on hourly chart. Besides, I had way too many trades going on all over the place, so I had to get organized. That was one way to do it, by closing a few of them. At the moment no plan for new trade, but only shorts are considered.
I’m adding another order, this time in AUD-CHF.
This pair will likely be coming up as a candidate for a long term buy pretty soon, but for now I expect some pull back. If the price moves under 0.8000 I’d like to get in at 0.7990. Target is 0.7900, and for stop I’ll use the nearest minor high.
Mike, how come you bought eur/jpy at the open and not gbp/jpy? Your trading includes a lot of the beast, so why not this time?
Diversifying a little bit. Remember that I always trade Beast short term breakouts, have another longer term trade and had few more Pound positions. EUR-JPY worked just fine
“New order presented…” So I’m all depressed, trying to look at the charts and pick an entry point when I switch to the daily chart and it spikes right before my eyes. Or maybe it just hadn’t updated in a while but I got a little jolt. I liked it.
Also managed to grab a few pips on the short side of EUR.GBP this morn. Maybe this one is coming back to earth after the moonshot of recent months? Another interesting perspective on this one from “Proprietary Trader”:
http://taichiseal.blogspot.com/2009/04/eurgbp-testing-trendline-support.html
Mark, when I originally started selling EUR-GBP in January, I was sure it showed blow out top. Since that time I had good results shorting it. Currently, though, my opinion is not that strong. If that was the top I thought it would be, price should be closer to 0.8000 level by now. In fact, daily chart looks like it’s consolidating, which favors another run on top. I’m looking for short trades only here, for now, but my convictions are not as strong as they once were.
Just like you stated in your post, Yen is stronger. Do you think this is over for now and perhaps now is good time to buy Yen pairs?
I’m waiting until after the BoJ meeting concludes before doing any new analysis. I think yen will get a little stronger, before turning again, but right now I’m leaving it alone, at least through today (Tuesday).
Man, yen is getting stronger. GBP/jpy under 147, good size move. Now I’m really glad my trade from yesterday was closed when it did.
[…] Markets must have liked it because AUD went on a run. This put a wrinkle in my plans from yesterday to sell AUD-CHF. It simply didn’t happen, price went the other way, but, for now, the order […]