Another volatile week in the currency markets and as you know (unless you are living inside a cave ), Mr Ben and BOJ trimmed their respective interest rates. Will we see continued upside on carry trades or is this just a prelude to lower lows? Frankly speaking I’m still bearish on where carry trade currencies will move. Below will be a strategy for some carry trades currencies for the coming week (to tell you frankly, I don’t think we should call them carry trades anymore)

USD/JPY:

Although the DOW rallied last Thursday and Friday, this pair seems to have hit a wall. Failure to break this wall should result to more downside movement. Prices seems to be trading around 98 to 99 area. We will evaluate long position once it breaks out of that GREEN downtrend line or else we will wait for an uptrend to take a trade on the sell side.

EUR/JPY:

I’m more inclined to actually trade this pair as the chart below clearly depicts some bearish price action.  I need to use the 1HR chart just to see how prices are moving. So a break of that RED support line will probably signal further downside and a retest of the lows.

GBP/JPY:

More traders are actually loving this pair. As you can see, its around 1K pips in a few hours! Although before the recent deflation, this pair just moves around 300 to 500 pips depending on the news.  Most of the time whenever there are trade setups with this pair, I need to pass on the trade as stops needed are quite huge. I will only trade this on the long side in case price breaks that green line at the same time it breaks out of the recent highs as this setup will give me some tighter stops.

Risk Warning: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. This is not any offer for you to go into any trade whatsoever. I will not be responsible in any way in case your dog died, your house got burned, you got fired , your wife caught you cheating and beat you up after reading this post.