Japan was closed today and that's been touted as a big reason for the fall today
They're back tonight (their Friday) and we could well see a decent chunk of this down move reversed, if they think it's over done. Japan will also be waking up to the possibility of intervention also, so that adds further risk to the price.
As the dust has settled somewhat, I've been thinking about a trading plan. Now that everyone is on edge over intervention that should limit further big falls. We've had a creep down to 111.50 and held and that PA goes along way to confirming my thoughts.
I'm going to play a buy order at 111.50 and another at 111.15 but keep a close eye on it through the rest of the US day. It's still only 2am in Tokyo so I reckon I've got until just before the US close to see how things play out. If I'm not filled I'm going to go to market on the order.
I'll look to grab 100 pips as a profit target if I'm right and depending on where I get in, will run a stop at 50 pips or under a big level like 111.50 or 111.00.
It's a bit of a punt as I'll be asleep while it's open but I'm judging the risks to the trade right now, not on what could happen over the next few sessions, and I feel the balance is in favour of it going up rather than down. One risk is what happens in Japanese stocks. If they crater then I'll likely get stopped out. If I wake up to find that the price is near or through 110 then I'll be looking to put on a late Friday night long to run over the weekend as an intervention trade. I can look at that all tomorrow though.
I still don't believe the BOJ is near to intervening, and things have calmed down to how we were this morning. That's the biggest factor they watch for, the volatility not the price levels.
If you're leaving your screens at any time before the Asia open then I'd once again suggest you have any JPY positions well managed so you don't wake up to any big negative surprises tomorrow.
