There has been a lot of noise about shorting the JPY crosses these last few weeks. For sure after quite incredible JPY weakness on the back of a return to some “risk appetite” (god I hate that phrase) to other majors during the past 12 months and there needed to be some correction.
Finding an entry into the JPY corrections though has been very difficult as both the GBPJPY and EURJPY have been bouncing around rather rangebound since the turn of the year. The reason for this is that the fundamentals for being long on GBP/EUR/USD vs JPY are immense and outweigh the shot term trade opportunities, and dangerous.
Japan absolutely needs to weaken its currency in order to start exporting again and additionally Japanese co.s abroad have had their returning foreign currency delivering less growth to the JPY denominated accounts for the past few years. Japan will start its QE soon, and then we will see the next stage of JPY weakness.
Anyway, I do enjoy the 30min trade patterns more than 4H or Dailies, but as I have other commitments sometimes the 4H signals are the ones that I can actually enter these days. This trade of GBPJPY I found on the weekend of 2nd and 3rd March. Nothing like price hesitation over more than a few bars on the 4H charts to get my interest. Took the break of 141 with a deep SL at 200pips below at 139 but comfortable support. Price moved very well for 10 days then Cyprus hit and back to the JPY went some flows…..bugger. You can see that the price then started to move underneath the new trend line rather than above it. At this point I got more aggressive with my stop loss and at the next pitch to 145 I moved to my SL to 143 and a few days later this was triggered. But a very nice trade thank you and will be looking for more long entries on this pair for the next year or so, will be a nice ride up to 160.
Happy and Relaxed Trading People
Intraday FX Trader