Trump up the dollar – USDJPY trade review.

One of the rules I have is not to put on positions late in the day during the New York session unless there is market-moving news I can capitalize on.

As a human trader, I break my rules more often than I would like to.

I put on a long USDJPY position at 108.81 a couple of hours before the equities close on Thursday. It went right away against me by 20 pips. When it got back to breakeven on 108.82 I closed it. It went bid in Asian and European sessions. I regretted closing it but that is part of the business. I got itchy fingers (a skill that serves well usually when I am wrong) and I did not want to look at the market once I got out breakeven of the late trigger as I had made enough on that day (Thursday) trading $USDCAD.

 

I came into the NY session on Friday thinking I should be long USDJPY. It seemed market absorbed the Italian risk and was unwinding it. Then it also seemed not to care too much about the trade war. I had capitalized on the Steel tariffs being long USDCAD on Thursday. That was a big move.

 

Then I saw the Trump tweet – being all excited about the jobs numbers. Honestly, I think I was too tired to understand right away that he already saw the numbers.

 

I did buy USDJPY at 109.20 before the jobs number. NFP beat expectations at 223K vs. 188K expected. Wages were up 0.3% vs 0.2% expected (up 2.7% YoY from 2.6% expected). At that point, USDJPY was bid on the Trump leak. It went from 109.45 into the 8:30 am release to 109.73 and sold off from there. I did catch the move to 109.68/70. I was not surprised it sold off later on. That is FX for you, especially when the rumor is bought and the news is sold. Frankly, this is what I like about following flow. Most times, my fundamental view is helpful but in terms of execution – following fundamentals only is a losing proposition.