• Home ::
• Technical ::
• Market View ::
• Currency Speculations

• Send
• Print
• Add To
• Rss

Currency Speculations

ffbab94b-77bb-4980-b11b-ce80cc6acad7

0

0

GBP/JPY

Sat, Oct 13 2007, 19:43 GMT
by Mihai Nichisoiu

Mihai Nichisoiu

In the wake of my last Sunday notes here on FXstreet.com, in my letter to clients of Monday, October 8th, I warned:

'I don't perceive an inflection to have occured in the GBP/JPY either.
Nonetheless, one should take into account the potential impact of an adverse, downward movement against one or more long positions entered recently. Beware, far more than in recent days.'

I began going long the GBP/JPY on September 28th, at market at 234.71. I continued to build a rather large position by gradually adding longs at market in the 235, 236 and 237 areas, then placed an order to buy on stop at 238.00 for an amount equal with the cumulative amounts of all previously entered positions - and that was triggered on Friday, October 5th.

In my letter of September 27th I wrote, 'In the longer run I remain generally pessimistic about the British Pound, - however, if I were a momentum trader, I would keep an eye on the multi-day price congestion that's still ongoing in the GBP/JPY.'
But, as a matter of fact, my very first interest in going long the GBP/JPY appeared on September 20th - a day on which the cross pair ranged between mid 232 and mid 229, testing the lower end of that 'multi-day price congestion' which commenced in late August.

Nonetheless, I did not have the courage to be a buyer on September 20th. As admitted in my letter of September 28th, '(...) setups like that multi-day (even multi-week) price congestion still ongoing in the GBP/JPY are not as easy play as one may generally expect (or a standard manual of technical analysis would have one to think) (...)'. So I decided to wait a few more days in order to earn enough confidence before starting to build that kind of exposure described above.

Finally, as in late US afternoon of Monday, October 8th, I saw what I took as an early warning sign while updating a daily chart of the EUR/JPY - I decided to dump all long GBP/JPY positions only a few hours later on, in the early European transacting time of Tuesday, October 9th, right at market at 238.39.

Published on  Sat, Oct 13 2007, 19:47 GMT