Cross-Eyeing: EURJPY – Trade Closed

Trade Closed: 2010-03-30 22:41

PoD Chart

Unfortunately, my long EURJPY trade got stopped out at 124.35 yesterday. Prior to that, the price broke above the psychological 125.00 mark only to fall back after credit woes in the euro zone resurfaced.

Apparently, the Greek debt drama still isn’t over! Before availing of the IMF’s aid, Greece made a feeble attempt to secure funds on their own. But yesterday’s Greek bond auction confirmed that the nation would most likely need to ask help from the IMF. Greece was only able to sell less than half of what they auctioned. Apart from that, another credit rating downgrade was seen in the euro zone, this time for Iceland. Boo, another one bites the dust…

Stopped out at 124.35. Total P/L: -100 pips/-1.00%

Trade Idea: 2010-03-28 22:46

PoD Chart

It seems that the inverted head and shoulders pattern on the daily I pointed out last week finally came to life. A good chance go long on the neckline break? Are we in for a shift in euro sentiment?

Last Friday, we saw the euro recuperate some of its losses as the EU finally announced that they agreed upon a bailout package for Greece. This allowed European leaders to let out a sigh of relief. Why? Well, let’s say that European leaders (ahem, in particular, Germany and France) didn’t come to Greece’s aid… all hell could have broke loose! But now that order is restored, this should boost confidence in the euro zone… until at least another country gets hit with a credit downgrade!

A major point of concern is the BOJ‘s decision to keep rates ultra-low at 0.10% and double their quantitative easing program to pull the country out of deflation. Considering the pick up in risk appetite, as portrayed by a rise in the equities markets, we could see investors start selling the yen to fund their positions in other riskier riskier assets.

We’ve also been seeing a lot of yen weakness as of late as investors trade in the yen for other major currencies. This is pretty obvious in the price action of the USDJPY, which has broken past some key trend lines on the daily chart. I suspect a breakout might be in the cards, especially if the Tankan manufacturing survey coming out later this week comes in off-target.

I have set a long order just a couple of pips above the neckline to catch the up-move if the pair breaks out. Because of all the uncertainty surrounding the markets, I have set conservative targets on this one: 126.15 and 129.00, both former support levels. In case of a fake-out, I’ve set a 100-pip stop loss.

Long EURJPY at 125.35, pt1 at 126.15, pt2 at 129.00, stop loss at 124.35. As usual, I will be risking only 1% of my account.

In other news, it looks like those Blue Devils are finally right back where they belong – in the Final Four! Now, my brackets are messed up already from all the “madness” during the first couple of weekends, but hey, I love college ball! I’ll be rooting for you Coach K!

Don’t forget to hit me up at MeetPips.com!

  • engin

    if 124.50 can hold then you dont have to wait 125.35
    one position @124.50 and add @125.20 pt.129

  • engin

    if 124.50 can hold then you dont have to wait 125.35
    one position @124.50 and add @125.20 pt.129

  • Phepi

    …and trade is close {(-_^)}

  • pipsprof.

    After most breakouts,there is usually a pullback,which can be monstrous at times,that was why i did’nt take d trade,and glad i observed that golden rule.Though it can be bought now after that pullback which was what i just did,hope i win, long 124.40,sl 123.40 and TP 129.00, there are always better trading days ahead!!!!!!!

  • Phepi

    …and trade is close {(-_^)}

  • pipsprof.

    After most breakouts,there is usually a pullback,which can be monstrous at times,that was why i did’nt take d trade,and glad i observed that golden rule.Though it can be bought now after that pullback which was what i just did,hope i win, long 124.40,sl 123.40 and TP 129.00, there are always better trading days ahead!!!!!!!

  • Cyclopip

    Yeah, my trading isn’t as good as I want it to be… But hey, losing is part of the game. I prefer to look at it as an opportunity to learn. And like you said, there are always better trading days ahead… So I’m not too bummed out! Cheers!

  • Cyclopip

    Yeah, my trading isn’t as good as I want it to be… But hey, losing is part of the game. I prefer to look at it as an opportunity to learn. And like you said, there are always better trading days ahead… So I’m not too bummed out! Cheers!

  • theoryx80

    Hmm.. I thought for a inverted head and shoulder, on a daily time frame, one would go long at 125.150 (as in break of the neck line), and stop loss at around below 121.00.. which is about 410 pips away… But a stop loss at 100 pips on a daily time frame? *shrugs and entered a long at 125.60*

  • theoryx80

    Hmm.. I thought for a inverted head and shoulder, on a daily time frame, one would go long at 125.150 (as in break of the neck line), and stop loss at around below 121.00.. which is about 410 pips away… But a stop loss at 100 pips on a daily time frame? *shrugs and entered a long at 125.60*