$USDJPY, the upcoming Asian trading & thoughts for December

• kevinmhughes
• November 19th, 2009

One of my favorite currency pairs to trade is the $USDJPY.  Now the 2 currencies seem to be the ‘carry trade’ gods!  In my mind, if you are using the $USD in a carry trade strategy and you are over leveraged you will probably be burned in the next 2 quarters, just putting it out there.  The chart below is of the $USDJPY in multiple time frames with some levels that I am watching (and usually do) & yes, they are pink.  When looking at the time frames, the solid pink lines are typically the levels that I will pay the most attention to because they are in the range of a particular session.  To me, they are support & resistances that will play a decent role and will allow me to act on a trade (both entry & exit).  The dashed or dotted lines when breached put my trading plan in a whole new game and alert me to start paying attention to ALL the markets because something has happened or will happen.  It’s a good opportunity to make money (or if you’re not managing risk, lose money).

When I place a trade (based on these highlighted leves; everything else being ignored) I place the order for (on average) 500,000 units with a proportionate stop loss to the volatility & range of the levels I chose.  When the price reaches the next level (whether its the Support or Resistance) I’ll close out 1/2 of the position & move the stop to lock in some pips/pts.  If the price continues in my favor, I will leg back into the trade and move the stop to the prices’ now support or resistance.

Who cares right? Right!  The reason for this article was for me to show you the levels I’m going to be watching and playing for the Asian session (11/19/2009).  OBVIOUSLY I’m trading intraday, if you’re a swing trader, the charts to the left are a 1 hour & daily charts.  As I said before, if the non-solid lines are breached, it’s a whole new game (in my mind) and I will adjust everything accordingly.

As a side note, take a look at the $USDJPY MONTHLY chart and look at the next support level, we are essentially there!  If at the end of November, the candle/bar or whatever you use closes below that line, we could be in for a run…  If December’s candle closes below it, then we will be in for a run to the downside (that would be my confirmation).  So my outlook for December is, well, crazy & I have NO idea!  I’ll just let the charts tell me where to go, as I always do.

Have a great night & I’ll see everyone during Asian trading!

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Tickers: USDJPY