Feed the chickens when they’re hungry?

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USD/JPY has broken critical resistance at 82.80/85 and taken out the barriers at 83.00. If long this sucker from a good level, I’d set a stop around 82.75 and walk away for a few days.

Technically it looks like it wants to make a run at the February highs of 84.18, at least. But if you are a short-term punter, and many of you are, a really quick punt to the downside may be the way to play near-term.

The market had to do a lot of heavy lifting to clear 83.00 and is likely to be left with a case of indigestion. The Fed is sure to do more QE, but they won’t do anymore than the $85 billion per month that the market has priced in, so the best of the Fed is fully priced in.  I’d take a small short, looking for a dip back to the 82.85/90 area. Keep stops really tight. 83.35 or so.

If this trade does not play out in the next few hours, run, do not walk for the exits. It is a risky, counter-trend trade, something I rarely recommend. USD/JPY trades at 83.16.

4 Comments

  1. Got a possible trendline (Apr 2011, Mar 2012)… using that as parameters and watching to see how it closes today… A QE positive would be a good excuse to give it a mid-term top…

  2. You rarely recommend it for good reason.
    Be very, very carefull. The Japs just may jump on an oppertunity like this.

  3. Thanks Jamie for the trade idea! ;)

  4. I am with you, selling at 83,14 with stop above 83.25 and a target of 82,87….

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