The FFWL (The Society for the Friends of Fibbles and Winnipeg Lines), of which I am the acting president, standing in for Harry Banes (main character in my book) while he’s on summer vacation, is putting out the following alert:

The NZD/JPY fell right outside its ascending channel and created a sell trade just like the CAD/JPY did.  The sell comes on the close of the candle that falls outside of the channel.  The Winnipeg Lines (the red lines outside the channel) give us our profit targets.

An update for you on how our Harry Dollar trade is doing.  According to how I played the trade, it closed at break even, but there are some of you who have kept the trade open until now and it’s got about 60 pips so far.  The stop should definitely be at break even now, and the profit target is still the top of the channel, which is right now at 99.10.

Yesterday we gathered around the pensieve and looked into the thoughts of the NZD/JPY on the 4 hour chart.  We talked about the fact that we’d like to buy the pair if it broke above resistance in the ascending channel.  And that’s what we did. 

Harry’s wand is covering up the price a bit, but the trade would have opened near 96.85 and would now have about 20-25 pips.  The target is the top of the ascending channel.  Moving the stop to break even after 30-40 pips is not a bad idea at all.

This pair has been trending upwards for quite some time now.  Right now it’s riding along or near the top fibble (fib retracement inside of the channel) and it could break upwards.  If we see a candle close above the top of the red dashed line, I think we might see a move all the way to the top of the channel again.

A move to the bottom of the channel might bring a nice bounce — I’d be looking for a candle on the 4 hour or the 1 hour to print some type of reversal (a doji, a hammer, a pregnant fair, the angry boss, the kobe chicken formation, or some such thing).  More on this as the market moves.