Cross-Eyeing: EUR/JPY – Close Trade

Close Trade: 2009-03-23 19:53

With risk appetites growing strongly across the board, today’s daily candle closed strongly above 130.00. My focus on Eurozone weakness is being outweighed by a return to carry trades and money flowing away from the US Dollar and back into the euro and commodities. With sentiment changing for at least the short term, I have decided to close my trade early.

Closing trade at market (132.36).

Total: -236 pips/ -0.78% loss

So, a small loss as resistance at 130.00 did not hold out for very long with sentiment shifting back to risk tolerance. With the trend flowing higher, I will look for pull backs to catch a better price to ride the wave higher. Stay tuned!

Trade Update: 2009-03-19 11:40

Good morning! The EUR/JPY market and it looks like sellers were waiting as that area has held once again and turned buyers away. At least for now. What next?

My trade has triggered and here’s nothing much to do at this point but wait and see if sellers continue to push the pair lower. We do have data coming from the Eurozone this Friday with German Producer Prices and EU trade balance. We may see more weak data, and with the arguments I presented earlier, I am still short bias against the euro and this pair and I will continue to hold. With the end of the week quickly approaching I may lock in profits and take some of my position off the table into the week. Stay tuned for updates!

Trade Idea: 2009-03-17 21:47
crosseyed chart

Good evening ladies and gents! I took a break for a hot minute to cool down, but now I’m back and it looks like EUR/JPY is giving us a ridiculously simple resistance play on the daily chart. Let’s check it!

On the daily chart, we can see the pair has been in rangebound mode since October 2008, and reversing at the psychologically significant level of 130.00 two times before. Stochastics are indicating overbought conditions and have been for quite some time. The quesiton is, “are there buyers left and will sellers take control once again?”

Fundamentally, risk tolerance has grown as banks forecast profits, positive rhetoric from the G-20, and probably on Bernanke’s interview where he said that IF the government succeeds in calming the markets, the recession may end this year. Really? As much as I respect the Fed Reserve Chairman and his wisdom, I still remember that this is the guy who was late to doing anything to stop the credit freeze. And knowing how slow any government works, I think that 2010 call he made for recovery is a bit optimistic. In my opinion, his interview on 60 minutes was an attempt to instill confidence.

The reality is that there is still no positive data in sight pretty much everywhere. My main concern for the Eurozone is the loan issues between Eastern and Western banks as lenders are deleveraging their over inflated books. Japan has issues of their own, and the Bank of Japan has taken measures to weaken their currency to boost exports, but I see a bigger issue in the Eurozone as they try to handle slowing growth and their own banking problems.

But for now, I am focused on that 130.00 level as I think many traders are watching that area. It may hold and that the rangebound behavior may continue until we see a solid change in sentiment or stabilization in the markets. I will short there and use a large stop of 300 pips. My position size will be significantly smaller, but I have large profit targets for a very nice reward to risk ratio.

Short EUR/JPY at 130.00, stop at 133.00, pt1 at 127.00, pt2 at 122.00

Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.

Stay tuned and good luck!

  • bilal_shirazi

    I’m in for two lots.

  • engin

    wait 131 dont hurry but if a hard sell come @130 then you dont have to wait 131 get short

  • bilal_shirazi

    I’m in for two lots.

  • aokmanga

    I suggest to look at the eur/usd 1.33 key levels too to go short.

  • bilal_shirazi

    So engin, how would you characterize a hard-sell?

  • engin

    wait 131 dont hurry but if a hard sell come @130 then you dont have to wait 131 get short

  • nemoz

    has this trade triggered yet?

  • hurtzi

    no, nemoz

  • aokmanga

    I suggest to look at the eur/usd 1.33 key levels too to go short.

  • bilal_shirazi

    So engin, how would you characterize a hard-sell?

  • bilal_shirazi

    It’s pretty close now.

  • nemoz

    has this trade triggered yet?

  • engin

    i mean strong react…

  • hurtzi

    no, nemoz

  • bilal_shirazi

    It’s pretty close now.

  • bilal_shirazi

    Still don’t follow engin (i’m learning the terminology). I took an aggressive play after the entry was reached and took some profit early via a trailing stop loss. Not sure what else I am going to do about this trade.

  • engin

    i mean strong react…

  • bilal_shirazi

    So much for lively conversation :)

  • bilal_shirazi

    Still don’t follow engin (i’m learning the terminology). I took an aggressive play after the entry was reached and took some profit early via a trailing stop loss. Not sure what else I am going to do about this trade.

  • engin

    i am waiting 130.21 again then i will decide wait 131 or get in …

  • bilal_shirazi

    So much for lively conversation :)

  • aokmanga

    i think that if the price break the 131 you can wait for more pips too…

  • julian

    bilal,, why don`t you start a forum about this trade on this site. Then maybe you will get some faster conversation.. maybe !

  • engin

    i am waiting 130.21 again then i will decide wait 131 or get in …

  • aokmanga

    i don’t know i like talk by comment here :)

  • aokmanga

    i think that if the price break the 131 you can wait for more pips too…

  • julian

    bilal,, why don`t you start a forum about this trade on this site. Then maybe you will get some faster conversation.. maybe !

  • cyclopip

    Thanks for the comments everyone! um, interesting conversation… i guess?? hehe So, who does everyone thing is gonna win… the euro or the Yen???

  • engin

    if it s cannot 128.73 before week over than wait 133-133.20 to get short 131 is temporary resistance before 133…

  • aokmanga

    i don’t know i like talk by comment here :)

  • cyclopip

    Thanks for the comments everyone! um, interesting conversation… i guess?? hehe So, who does everyone thing is gonna win… the euro or the Yen???

  • engin

    if it s cannot 128.73 before week over than wait 133-133.20 to get short 131 is temporary resistance before 133…

  • julian

    engin,i presume you meant if it can not break and close down through 128.73 by week end… If so, on which time frame/chart ? hourly, 4 hourly or daily ??

  • engin

    it doesnt matter 1 hour or 4 hour or 5 minutes… when the week over trading was closed if it cannot break 128 then target will be 131 and 133

  • julian

    cyclopip, i kind of agree the conversation ain`t great ! .. going slightly off the subject of eur/jpy.. out of interest do you set yourself a weekly pip goal or just go with the flow ? also do you use a compound growth method with your account when placing your stakes ?? What are your thoughts on engin`s theory ?? and finally who do you like best happy pip or queen pipopatra ??!!

  • julian

    engin,i presume you meant if it can not break and close down through 128.73 by week end… If so, on which time frame/chart ? hourly, 4 hourly or daily ??

  • bilal_shirazi

    It hasn’t broke 128 yet, back above 129. on my charting package (4hr) it look like an uptrend (MACD), oversold (stoch), RSI > 50. I don’t understand anything else so if anyone else sees other technical indicators (or even fundamental) please share.

  • engin

    it doesnt matter 1 hour or 4 hour or 5 minutes… when the week over trading was closed if it cannot break 128 then target will be 131 and 133

  • julian

    cyclopip, i kind of agree the conversation ain`t great ! .. going slightly off the subject of eur/jpy.. out of interest do you set yourself a weekly pip goal or just go with the flow ? also do you use a compound growth method with your account when placing your stakes ?? What are your thoughts on engin`s theory ?? and finally who do you like best happy pip or queen pipopatra ??!!

  • bilal_shirazi

    It hasn’t broke 128 yet, back above 129. on my charting package (4hr) it look like an uptrend (MACD), oversold (stoch), RSI > 50. I don’t understand anything else so if anyone else sees other technical indicators (or even fundamental) please share.

  • engin

    if it cannot break 130.20 then target again 128 but if it cannot break i almost sure that price can up break 130.20 and target will be 131 and 133. but if we’re lucky it can break 128 before today closed then next week target will be 126 and 125.50 we will see what happen?…

  • julian

    just hit 130 again on the but looking like its bouncing off.. fingers crossed it does. hopefully this will prove a strong resistance.. fundamentals has to be on our side here as technicals are not looking great for the short

  • julian

    closing below 130 on this hourly bar should help.. 10 mins to go and shes sitting at 129.90

  • engin

    if it cannot break 130.20 then target again 128 but if it cannot break i almost sure that price can up break 130.20 and target will be 131 and 133. but if we’re lucky it can break 128 before today closed then next week target will be 126 and 125.50 we will see what happen?…

  • julian

    well its been great speaking to you guys !! have a great week end …

  • julian

    just hit 130 again on the but looking like its bouncing off.. fingers crossed it does. hopefully this will prove a strong resistance.. fundamentals has to be on our side here as technicals are not looking great for the short

  • julian

    closing below 130 on this hourly bar should help.. 10 mins to go and shes sitting at 129.90

  • julian

    well its been great speaking to you guys !! have a great week end …

  • LoboTrader

    Cyclopip: I Learn many things about FOREX Market thank’s to your analysis, but i don’t know why you only take the big profit or the stop & loss choice. In this trade, in five ocassions you have the chance to take at least 150 pips, 6,7,8,15 and 16 hours after your entry, and you don’t do it. And with all my respects to you, but i think that this is not a very good money management behavior. Best Regards from one of your pupil.

  • LoboTrader

    Cyclopip: I Learn many things about FOREX Market thank’s to your analysis, but i don’t know why you only take the big profit or the stop & loss choice. In this trade, in five ocassions you have the chance to take at least 150 pips, 6,7,8,15 and 16 hours after your entry, and you don’t do it. And with all my respects to you, but i think that this is not a very good money management behavior. Best Regards from one of your pupil.

  • julian

    I closed out out ahead of the week end with around 40pips profit. Had a feeling she was going to close above 130 which she did. Now if engin is right which he quite often is then she should be drifting up further from here.. especially as she has now closed above the 130 resistance level on the daily and the trend is bullish.. so if this is the case , for those that are out of the trade already, we could potentially get back in at a better price with a smaller stop loss. Again it would be great to get more comments/ views/conversations going on these posts/trades so we can all learn from each other and help each other..starting with you cyclopip! your the captain of this ship …come on we need you at the wheel shouting orders !!

  • julian

    I closed out out ahead of the week end with around 40pips profit. Had a feeling she was going to close above 130 which she did. Now if engin is right which he quite often is then she should be drifting up further from here.. especially as she has now closed above the 130 resistance level on the daily and the trend is bullish.. so if this is the case , for those that are out of the trade already, we could potentially get back in at a better price with a smaller stop loss. Again it would be great to get more comments/ views/conversations going on these posts/trades so we can all learn from each other and help each other..starting with you cyclopip! your the captain of this ship …come on we need you at the wheel shouting orders !!

  • aokmanga

    i took the 150 pips and i will go short again with less risk for more pips :)

  • aokmanga

    i took the 150 pips and i will go short again with less risk for more pips :)

  • cyclopip

    Thanks for the comments everyone! Lobotrader, I appreciate your critism on my money management, but I set stops and profit targets for a reason. If I took profits early every time I had a little bit of profit but held on to losers to my stop, then my average win would be way smaller than my average loss. One loss could potentially destroy a string of small profits. I go for the profit targets that I do because it is within the realm of current market volatility and market dynamics, and better in the long run as far as average win vs. average loss. Now, if my bias changed, then that would be ok to exit early, but I am still bearish on Euro as I think that will be the weaker currency over time. We’ll see how that plays out. Thanks.

  • cyclopip

    Thanks for the comments everyone! Lobotrader, I appreciate your critism on my money management, but I set stops and profit targets for a reason. If I took profits early every time I had a little bit of profit but held on to losers to my stop, then my average win would be way smaller than my average loss. One loss could potentially destroy a string of small profits. I go for the profit targets that I do because it is within the realm of current market volatility and market dynamics, and better in the long run as far as average win vs. average loss. Now, if my bias changed, then that would be ok to exit early, but I am still bearish on Euro as I think that will be the weaker currency over time. We’ll see how that plays out. Thanks.

  • bilal_shirazi

    Looks like a strong upswing on my 4-hr chart. Hope you all avoid a stop-out. I’m looking for another short entry point.

  • bilal_shirazi

    Looks like a strong upswing on my 4-hr chart. Hope you all avoid a stop-out. I’m looking for another short entry point.

  • engin

    you can try 133.133.14 to get short stop loss 134.30 bu if it cannot break 131 or 130.21 then we will understand trend is reversing but actually i dont think so.
    i am getting short @133 good luck everyone

  • engin

    you can try 133.133.14 to get short stop loss 134.30 bu if it cannot break 131 or 130.21 then we will understand trend is reversing but actually i dont think so.
    i am getting short @133 good luck everyone

  • julian

    engin, whats your view now ? tried to pull back but didn`t, seems like its heading upto 133 as you said. hopefully not as i am now in this trade

  • engin

    still waiting 133 but if its upbreak 133 fast. then 134.20 is stronger than 133 but if price cannot break 131-130-90 then next target will be 139

  • julian

    engin , when you say , if it can not break down through 131 it will then go to 139, do you mean if it can`t break through by today or by this week end ??

  • julian

    engin, whats your view now ? tried to pull back but didn`t, seems like its heading upto 133 as you said. hopefully not as i am now in this trade

  • engin

    still waiting 133 but if its upbreak 133 fast. then 134.20 is stronger than 133 but if price cannot break 131-130-90 then next target will be 139

  • julian

    engin , when you say , if it can not break down through 131 it will then go to 139, do you mean if it can`t break through by today or by this week end ??

  • LoboTrader

    Cyclopip: Thank you very much for your attention, with your answer I must learn one lesson more about Money Management. Best Regards.

  • LoboTrader

    Cyclopip: Thank you very much for your attention, with your answer I must learn one lesson more about Money Management. Best Regards.

  • engin

    of course weekly in one day it cannot reach that point if 134.50 break then target will be 139-139-70 the price can test 134.10 and 134.50 again you can try short @ that point

  • engin

    of course weekly in one day it cannot reach that point if 134.50 break then target will be 139-139-70 the price can test 134.10 and 134.50 again you can try short @ that point