Risk appetite plus safe-haven outflows equals gyu sashimi
Fundamentals:
-Pound strong:
As we already know, pound is very strong due to the great economic recovery in the UK. Restriction easing is in play, housing market is booming, inflation is expanding so there is some signs of a rate hike potentially earlier than other countries, vaccine roll out is very smooth, small companies are surviving and are optimistic for the outlook of 2021-22.
The main thing I'm taking in consideration now beside all of the above, is the fact that there is a global recovery taking place right now and countries are getting in the phase of post-recession very fast. A global recovery after a pandemic will bring (and already brings) optimistic sentiment for investors and for almost everybody. This will positively affect economic activities as consumers are starting to spend again and as investors are starting to gain an appetite for risk again.
What I want to say is: The pound is a risk-asset. Investors want to buy the Pound when they have a big appetite for risk.
-Yen weak:
As mentioned in my latest trade idea on EURJPY, the Yen is weak because of the contracting economy and the weak handling of the pandemic. There is a lot of bad economic data for Japan and the outlook is not looking good for now comparing to other countries.
One more thing I want to add: Yen is considered a safe-haven. Investors buy the Yen in time of crisis, incertitude, war, political tensions, pandemic, etc. Right now, there is a global recovery and there is an expanding optimistic sentiment all around the world including the USA. So investors have no interest of buying the Yen because of there appetite for risk. They want to sell the Yen.
Market sentiment:
Well, GJ seems to crash right now, retail traders are selling massively and impulsively. Fundamentals are bullish. I'm gonna buy what the retail traders are selling to me.
-Pound strong:
As we already know, pound is very strong due to the great economic recovery in the UK. Restriction easing is in play, housing market is booming, inflation is expanding so there is some signs of a rate hike potentially earlier than other countries, vaccine roll out is very smooth, small companies are surviving and are optimistic for the outlook of 2021-22.
The main thing I'm taking in consideration now beside all of the above, is the fact that there is a global recovery taking place right now and countries are getting in the phase of post-recession very fast. A global recovery after a pandemic will bring (and already brings) optimistic sentiment for investors and for almost everybody. This will positively affect economic activities as consumers are starting to spend again and as investors are starting to gain an appetite for risk again.
What I want to say is: The pound is a risk-asset. Investors want to buy the Pound when they have a big appetite for risk.
-Yen weak:
As mentioned in my latest trade idea on EURJPY, the Yen is weak because of the contracting economy and the weak handling of the pandemic. There is a lot of bad economic data for Japan and the outlook is not looking good for now comparing to other countries.
One more thing I want to add: Yen is considered a safe-haven. Investors buy the Yen in time of crisis, incertitude, war, political tensions, pandemic, etc. Right now, there is a global recovery and there is an expanding optimistic sentiment all around the world including the USA. So investors have no interest of buying the Yen because of there appetite for risk. They want to sell the Yen.
Market sentiment:
Well, GJ seems to crash right now, retail traders are selling massively and impulsively. Fundamentals are bullish. I'm gonna buy what the retail traders are selling to me.
Trade active:
Buy limit was triggered. I'm in the trade now.
Now I'm gonna manage my trade when market reaches 153,100: when the market touches this price, I will move my stoploss order to entry price. If the market reacts considerably on this price, I will take a partial profit (close 20% of position size), but only if there is a rejection at 153.100.
Now I'm gonna manage my trade when market reaches 153,100: when the market touches this price, I will move my stoploss order to entry price. If the market reacts considerably on this price, I will take a partial profit (close 20% of position size), but only if there is a rejection at 153.100.
Trade closed: stop reached:
Stop loss perfectly executed. On to the next.