FX Trading, Moves of the Day

Excitement in the FX markets; USDJPY plunges to lows not seen since most of us were born, followed by an incredible rally in early Asian trading. Has the market flushed out all the USDJPY longs? All JPY crosses follow suit, but against the USD, EUR & GBP still show little incentive to head either way (although we see 1.40 and 1.61 being tested again respectively as we write). 

Japan denies talk of huge JPY repatriation, but regardless, it's what the market thinks that matters. Things have since quietened down somewhat, due in no small part to the fact the the G7 finance ministers and central bankers are going to hold a teleconference at 0700 Japan Standard Time Friday morning, 18 March 2011. Whether this will lead to coordinated action to stabilise markets remains to be seen, but who would want to bet either way? Keep this in mind if you plan to enter new positions, as short-term volatility may shoot through the roof. 

I'm sure you've all been looking at your colorful charts with all the drama going on, but I'll put up a couple of my own just to show you the levels where our stops are located. In times like this I like to keep it simple, so if the powerful moves recently do not continue, we lock in profits when obvious levels are taken out and sit back to re-assess the market.

In USDJPY, our stops would be placed just above 80.20, where the previous low was:

Stop Level for Long USDJPY Position

In the June Nikkei, buy stops have been shifted lower to just above 9130:

Stop Level for Short Nikkei Position

In the meantime, don't get too caught up in the markets, trading requires patience.

Peace