Friday 2 March 2012

TRADE ALERT: After 1 Month+, We Exit USDJPY

It's been emotional.


At 14:19pm GMT we finally sold our most profitable clip of Dollars (USDJPY) back into Yen from which we had bought them. In late January, we paid in the low 76.xx (weighted average) for these USD and, as we sell them on for 81.67 into the market, we consider this trade our most well-measured and skilfully (fortunately) timed one yet.

I expect USDJPY to price north of 84 at some point this year. However, we exit now as technicals are not supportive of our position - the upward sloping trend that has defined the rally is now resistance (not the support we saw in Feb) and particularly Yen-bearish news has failed to break this zone, always a sign that the market is overextended and a correction is imminent.

A decent retracement back to the high 70s will afford us a new entry, otherwise it's goodbye to an old friend!

Thanks for the Alpha,

JF
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