My picks: Long GBPJPY
Expertise: Combining Money Management with Fundamental and Technical Analysis
Average Time Frame of Trades: 3 days - 1 week
What makes one technical break a dude and another the trigger for trend renewal? Momentum. There are many technical levels that can be drawn up on any chart for any time frame. Any one of them (even the smallest level) could instigate a defining trend should spot be in the vacinity just before a major shift in price action or the market simply be waiting for any catalyst to tip the scales of a ill-found balance. So, I have to ask myself whether the various trendline breaks of the past 12 hours from so many of the yen crosses is the genuine thing. It must be noted that this pick up in the yen was seen nearly everywhere, it extends multi-session declines and there have been more than a few technical levels ruffled in the push. However, there is still an abundance of technicial support below; and more importantly, there is a lack of momentum or fundamental drive to this move.
In the end there is less risk with holding with the recent pace of market activity (and further not betting on some unforseen fundamental catalyst or trigger to capsize sentiment) and taking a stance against short-term technicals. This means taking risk in my position. There are opportunties for a counter-trend trade in USDJPY, CHFJPY and other crosses; but my interest is specifically with GBPJPY. This pair has extended itself when the broader market has been quiet. And, given its unique level of volatility, a snap back can tag my targets quickly. With the rising trend of swing lows (that connects 2/2, 2/12, 3/12, 4/28, and 5/18 to today's low) as my backdrop of support; I will place my entry on a half sized position at 151.50. This is half sized due to the necessary wide stop (149.55) when trying to call a short-term top or bottom. My first target will equal risk at 153.55. When this target is hit, I will take profit on the first half of the position and trail the stop on the second half to break even and let it ride to my secondary objective at 157.05.
