St. Patrick’s Day Preview: Position Long In The USD/JPY

The end of another week is upon us and the forex is seeing some wide open daily ranges. The Aussie is leading the action, but there is considerable participation in the USD/CAD, USD/JPY, and NZD/USD. Trending markets are not as common for a Friday session. Nonetheless, downtrends are in full effect for gold as well as the Kiwi and Aussie.

This weekend features a vacant economic calendar, with no events scheduled until after the Sunday open. Saturday, March 17 is St. Patrick’s Day. If you are enjoying corned beef and cabbage with a couple of green beers, relish the celebration!  

After the party ends, there is the business of next week’s market open. Below are two items that will influence the Monday session:

Country                          Event

Japan                             Trade Balance (Feb)

Eurozone                       G20 Meeting

Next week is a huge one for the forex. Wednesday marks Jerome Powell’s first go-round as chairman over a meeting of the FED. The consensus is expecting a rate hike, so there is some volatility headed our way. Be sure to tune in next week for a thorough breakdown of what this FED meeting means to your trading account.

USD/JPY Technicals

The USD/JPY is one of the majors that is on my radar for upcoming sessions. Price has entered consolidation and is poised to breakout.

For the past two weeks, the USD/JPY has rotated between the 107.00 and 105.00 handles. This is a considerable range, but I am inclined to think that we are leaving this area in coming sessions.

Trading Plan: Upon the Sunday electronic open, I am placing buy orders in the queue above today’s high at 106.37. The initial stop loss will be beneath today’s session low at 105.59. This is a true position trade, looking for price to make a run at the 108.00 level. Given a 77 pip initial risk, a management plan of 2:1 R/R is appropriate, yielding 154 pips profit. If price breaks to the bear and takes out today’s low before hitting entry, then the orders will be scratched.

Position trades often take some time to develop properly. In the event that this play is elected on Monday, check back for tips on how to limit risk while maximizing reward. Until then, enjoy St. Patty’s Day and see you Monday morning!