Wednesday, September 5, 2007

GBP/JPY Prediction

It was a nice long holiday weekend here in the U.S., but it's time to get back to work with a little stop adjustment as our trade goes our way in USD/JPY.

The pair has moved lower during the morning European trading session, making a low around 115.30 before retracing back up to 115.50.

I would like to reduce our risk in the trade progressively by adjust our stop with every 50 pips movement in our direction. So...

Adjust stop from 118.00 to 117.50.

Looks like risk aversion in the market as USD is currently making a small rally against the majors, except for the Yen. We will see more volatility this week with major reports coming out of the US, so stay tuned for trade adjustments or possible scenarios where we may have to close our position prematurely. Good luck!

Trade Update: 2007-09-01 10:50

Our trade has been triggered short at 116.00 as the pair rallied to 116.50, but shortly fell before the end of the trading day back below 116.00

Again, I stand on the view that we will see more risk aversion to come as we continue to get more and more data on how bad the mortgage mess will effect different aspects of the economy from jobs, consumer spending, economic growth, and so on.

So, we will hold on to this trade and stay tuned for stop and profit target adjustments. Good luck!

Trade Idea: 2007-08-30 20:46

PoD Chart

For tonight's "Pick" we are going to check out the USD/JPY and see if we can get some major pippage out of it!

Now, I'm in the camp that thinks there is more risk aversion to come and that we've only seen the beginning. This lines up with our chart on USD/JPY. As we all know, global risk aversion benefits the Yen as market players reduce risk through carry trade unwinding. The pair is currently in a down trend with stochs in overbought territory and price action finding resistance at 116.00. We are going to have a wide 200 pip stop, so adjust position sizes accordingly to keep within the 1% account risk rule!"

Short USD/JPY at 116.00, stop at 118.00, pt1 at 114.00, pt2 at 110.00

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