Close Trade: 2009-08-14 12:57
Good afternoon! It looks like a touch of lower consumer confidence has been added to the bad taste US retail sales data left yesterday, and traders sold off riskier assets by the loads. With EURJPY down nicely since my entry point, and the weekend quickly approaching, I have decided to close down this trade.
Close remaining position at market (134.80).
1st Half: +85 pips
2nd Half: +220 pips
Total: +0.7625% gain
I think we may be in the midst of a short to mid term sentiment shift as traders and the general public start to take the view that this recovery will not be quick. Risk sentiment will continue to play a big factor in currency movements and I may jump back in short EURJPY at the beginning of next week. Stay tuned!
Trade Adjustment: 2009-08-13 11:36
Good morning! It looks like Eurozone GDP dished out better than expected numbers, giving EURJPY a boost during the European trading session. My short entry orders at 137.00 were hit, and after making highs around 137.80, the pair fell throughout the morning US trading session and hitting lows at 136.00.
It was the weaker than expected US retail sales that gave my trade a boost, and it may be a sentiment changer in the short to medium term as it show consumers are not yet on jumping on the recovery train. Let’s see how the rest of the week plays out and stay tuned as I may close my trade by the end of Friday to avoid weekend event risk.
Trade Idea: 2009-08-12 19:28
I have the four hour chart up and prior to the fast drop, there was a bearish divergence between price and the oscillator. Prices continued with higher “highs,” while stochastics had lower “highs.” Well, we saw a drop, but will the pair fall a bit more? EURJPY has retraced back up a bit after traders bought up “high-yielders” during yesterday’s European and US trading sessions. I used the Fibonacci tool to see how far the pair has retraced, and it looks like a 61% pull back. Will we see resistance and is it time to jump in short? Hmmm, I don’t know about you but I’m ready to jump back in.
Before I do so, I can’t ignore the fundamentals. Confidence may be returning to the markets as speculation continues to grow that the global recession is at an end. I honestly couldn’t tell you if it is or isn’t, and while I think the global financial system and economy has probably been saved from a dark abyss, that doesn’t mean we will return to pre-crisis levels of growth anytime soon. Jobs are still being lost on a monthly basis with no one really hiring, banks still own toxic assets, consumers are saving rather than spending, etc. Where’s the good news? When will the global economy grow WITHOUT government stimulus? Again, I couldn’t tell ya, but the data is telling me we may be on a long road to recovery.
Later today, we have Eurozone GDP and the ECB monthly report. This should be an interesting day for the euro pairs as both reports should bring in a good amount of volatility. Be safe during those event times.
So, I’m shorting EURJPY on the bearish technical setup, with my bearish fundamental views. I think the market may squeeze out a bit more retracement before sellers take charge, so I’ll wait to see if the market hits 137.00 before jumping short. My stop will be above the previous day high and I will target previous support levels. This pair moves almost 200 pips a day, so I may see results before the end of the week. Here’s what I am going to do:
Short EURJPY at 137.00, stop at 139.00, pt1 at 135.00, pt2 at 133.00
Stay tuned and good luck!