Trade Idea: 2010-05-20 23:14
After the EURJPY hit my first profit target, it quickly rose to break the rising trend line. Because of this, I decided to close all my remaining position and lock in profits. I could’ve have gotten more, but I don’t feel bad at all. I have broken out of my trading slump and won my second trade in a row. I am slowly getting my game face back! Touchdown!
Trade Idea: 2010-05-18 23:02
What more can I say about the euro other than its just really weak right now?!
Traders have been selling the euro and unwinding their positions in European assets. This has boosted the yen as traders have to cover their short positions. This explains why we’re seeing the EURJPY trend lower and lower as of late.
Looking ahead in the calendar, it looks like we’ve got no hardcore data coming out from the euro zone over the next couple of days. But of course, data seems to be taking a backseat to all the news regarding the bailout package. I’m going to have to stay on top of the market and watch out for any surprise news that might come out.
The one report that might make yen pairs move is the Japanese GDP report due tonight at 11:50 pm GMT. Early estimates are that the Japanese economy grew by 1.4% in the first quarter, which would be a nice improvement from the previous quarter’s revised figure of 0.9% growth.
One thing that concerns me is that after looking at the COT report, it looks like short euro futures orders are now at an all time high. Are there any sellers left in the market? We may be in for a short euro squeeze, which is why I’m looking to set my short order pretty far from market, as I want to get in at the best price possible.
Technically, I am hoping that the descending channel on the EURJPY would hold. As you can see, both the upper bound resistance and lower bound support of the channel has been intact since the start of last week. With stochastics at oversold territory, it looks like the pair is hoping to retrace some of its losses. In other words, another chance for me to jump in short and sell the pair at a higher price! Mwahahaha!
I have set my short order at the top of the channel, somewhere around the 61.8% Fibonacci retracement level. I will ultimately target 109.00, which is the bottom of the channel, but I will take some profit at former lows. As for my stop, I placed it just a couple of pips above the most recent significant high.
Here’s the game plan:
Short EURJPY at 113.90, pt1 at 111.30, pt2 at 109.00, stop loss at 115.70. I will risk the usual 1% of my account.
I’m going to be monitoring this trade over the next couple of days, but when the weekends rolls around, I’m going to hit the pub to watch the Champions League match between Inter Milan and Bayern Munich! Hopefully my boy Eto’o pulls through in the clutch!
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