LONG USD/JPY
@ 114.86
SL @ 112.16
Updates Jan 19th
****If you want to trade USD, you can choose to enter during the inauguration but be very careful as the weekend is coming and we might see gaps in USD pairs after Monday.****
Move SL @ 114.30
Again, i’m in this trade b/c the following 2 events might still push USD further, but i will definitely set to BE or out prior to the weekend, unless the inauguration is very positive to push USD/JPY 100 pips away from my entry to prevent any possible gaps over the weekend.
out @ BE
- USD has regained strength today mainly from Yellen’s comment of market recovery and possibility to tighten interest rate faster. This alone with the already strong fundamental datas and today’s CPI datas have once again showed the result. So now we do have both fundamental and sentimental reason for USD to go up, however, the risk of uncertainty still lie with Donald Trump and the inauguration is Friday, so there is still significant amount of risk for U.S economy as his protectionism policy will really turn things downside. The risk sentiment also shifted from off to on after major event of UK to finally give out a clear plan for hard Brexit. The market was also already in a downside movement from previous days, so a recovery is inevitable. We want to take this trade because of the USD strength in both fundamental and sentimental, and the JPY has lost strength since UK PM May’s speech. USD/JPY currently has a strong Bullish Big Shadow with hourly chart above 100MA.
- The catalyst is Yellen’s speech, UK PM’s speech, and continuation of good fundamental datas from U.S plus market recovery from risk off sentiment to on.
- We’re actually in nice support area and hourly chart just crossover 100MA.
- The risk is really the Donald Trump inauguration, that’s why we don’t risk 2% otherwise this trade fits into our analysis that both fundamental, sentimental and technical are in line. However, because of the major risk from president inauguration less than 48 hours, we will not risk more than 1%.
- I’ll manage it with sentimental aspect as Yellen is due to speak again tomorrow and ECB is also having a conference. However, both events are not major roadblocks for this trade as ECB conference is expected to be dovish while Yellen is unlikely to contradict herself as she already gave out a positive comment today.
- Yes but anything can happen so trade carefully as usual.
LONG USD/JPY
@ 114.86
SL @ 112.16
- We got filled today and YEN has lost ground due to positive sentiment, however, USD/JPY did not take off as much as AUD/JPY which went up very strongly for now during London session. The ECB also provided enough negative sentiment for EUR which suppose to help USD but did not do so. I’m waiting for 8pm Yellen speech to have a possible boost but if we do not see that, then i’m intended to exit USD trade as tomorrow’s inauguration will be a risky event to hold any USD pair into. Yes it might help us but it might also hurt us and as I don’t have enough fundamental bias in this sense, i don’t want to get into a trade with only 50/50 conviction as that will be a form of gambling.
Updates Jan 19th
- Looking at hourly chart, the USD has been bought throughout the day and peak around London closing, then it slowly edged down to finish the day with a Kangaroo tail pattern. It’s not really a good sign because if we look at other JPY pairs such as AUD/JPY, NZD/JPY, EUR/JPY or even CAD/JPY and you can see that JPY has been largely sold off. However, although we ended the day with green candle, but USD/JPY did not go up too much regardless of the strong fundamental and yesterday’s good sentiment from Yellen.
- I think by looking at the fundamental picture alone with the price action, we can fairly say that the market is really cautious in buying USD and the only possible reason is tomorrow’s inauguration of Donald Trump or the actions that he’s about to do following the weekend - which again, no one knows for sure. This creates large uncertainty over USD.
- I’m still in this trade because if we look at the hourly chart, although we edged down for the day, but we’re still heading uptrend and now seems to be testing the support. Regardless, I’m still moving my SL to last 2 swing low in hourly chart @ 114.30 which is also below handle 115 and 114.50. There are too factors that might drive USD either way from now on, one is the Yellen speech at 8pm and the other one is the Chinese datas which both can effect not only dollar but yen as well. So i’m protecting myself but also leave enough room to manoeuvre.
- I will not really get into any USD trade now because of the risk event of Inauguration which is less than 48 hours away.
****If you want to trade USD, you can choose to enter during the inauguration but be very careful as the weekend is coming and we might see gaps in USD pairs after Monday.****
Move SL @ 114.30
Again, i’m in this trade b/c the following 2 events might still push USD further, but i will definitely set to BE or out prior to the weekend, unless the inauguration is very positive to push USD/JPY 100 pips away from my entry to prevent any possible gaps over the weekend.
out @ BE