US dollar lifted on upbeat retail sales figure

Originally entered on the technical setups, two of my trades managed to capitalized on the stronger than expected retail sales figure along with the upward revision for June and May. 

USDJPY: 

usdjpy1

Despite the de-escalation in the geo-political risks as North Korea backs down on missile testing near Guam, the yen remains relatively weaker against the US dollar on both technical and fundamental levels.

My entry was based on the two potential support levels at the 109.41~ and 108.31~ levels respectively. Although price didn’t do a perfect test of either, but the doji in that that zone was a good first indicator that the selling pressure has been exhausted. After seeing the bullish bar that followed, I got in at a bit above the halfway mark.

usdjpy2

On a closer look, I have annotated two levels on my chart with the lower one representing a potential modification of the stop loss level. The 110.91~ level is a key level to watch as it previously has demonstrated that it is a strong resistance level. In the past day, we have already observed price reaching near that level and sold off to the same extent as indicated by the bearish red candle of the same size. I intend on keeping this position open for the time being unless there’s a clearer indication that it’s breaking lower.

GBPUSD:

gbpusd1

I flip flopped around for this trade especially as I originally expected that level to hold up. This was back on Sunday’s open and the green bullish bar was an indication I was looking for as another day’s close above the support line. However, I soon realized that it did not look that way on Monday.

I honestly see myself holding this trade for a much longer duration. Here’s a monthly chart to see why:

gbpusd2

First off, shorting GBPUSD provides a positive swap charge so it does work as an interest rate differential strategy. On a technical note, today is the 15th of August so we’re halfway through this month and we’ve already returned the gains made in the past two months. As Brexit risks loom and missed inflation target, the pound sterling continues to have a bearish outlook for the weeks ahead.

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