Cross-Eyeing: EUR/JPY – Trade Closed

Trade Closed: 2009-05-12 12:20

Good afternoon! My trade was triggered during the morning Asia trading session as EUR/JPY made a low around 131.72 and hitting my orders at 131.80. The pair rallied from there into the European trading session, making a high around 133.50, and hitting my first profit target along the way.

Half of my position was closed for profit and I adjusted my stop on my remaining position to breakeven to create a risk free trade. Unfortunately, that was it for the rally as the Yen gained strength across the board and brought EUR/JPY back to it’s current levels around 131.30 and stopping my trade out.

1st Half: +100 pips
2nd Half: +00 pips
Total: +0.5% gain

So, a nice trade to start out the week. Let’s see if I can get another one in….stay tuned!

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Trade Idea: 2009-05-11 17:07

crosseyed chart

Good afternoon Forex peeps! After touching 130.00 and rallying higher on continued rising risk tolerance last week, EUR/JPY started this week on a pull back of profit taking. This may be a chance to jump in the trend high on a nice and easy technical setup. Check it!

Usually, I have the 4 hour chart up, but I zoomed down to the 1 hour timeframe to give a clearer picture on what’s going on. The pair has been on a fast rally since hitting 125.00 a few weeks ago, and testing 130.00 last week. We can clearly see a retracement down into the Fibonacci retracement area drawn on the chart. Stochastics are indicating oversold conditions on the 1 hour chart, and are indicating near oversold conditions on the 4 hour chart. I’d like to wait to see if the pair hits the 61% Fibonacci level before jumping back in long.

Fundamentally, the ECB cut interest rates last week and introduced quantitative easing actions for the first time. This week German and Eurozone CPI could push the markets one way or another. Inflation is forecasted to be much weaker than the targeted 2.0% and could spark further stimulus actions from the ECB. We will also see Q1 GDP on Friday. No major news expected on the calendar for Japan, so look for global risk tolerance to continue to influence price action in the Japanese Yen.

So, my trade idea is based mostly on technicals as the trend has been higher on this pair. Also, sentiment has been focused on that the economy may be getting “less worse.” Regardless of how bad it is out there, as long as it is no longer falling off a cliff, investors seem to want to buy in on that alone.

I will go long at the 61% Fibonacci area and target previous highs. Here’s what I am going to do:

Long EUR/JPY at 131.80, stop at 130.80, pt1 at 132.80, pt2 at 135.00

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

Stay tuned!

  • Dachelm

    There is something that I always wanted to clarify. Please tell me how your entries works. Do you enter with 2 positions risking 1% in total and then you close the first half and then the other one. I’m confused. Sorry if is a dumb question but you will help me a lot to understand you.

    Thanks

  • Dachelm

    There is something that I always wanted to clarify. Please tell me how your entries works. Do you enter with 2 positions risking 1% in total and then you close the first half and then the other one. I’m confused. Sorry if is a dumb question but you will help me a lot to understand you.

    Thanks

  • cadarkitek

    I’m in a trade in the opposite direction, reason is because this pair broke the up trend line and has retrace to test it forming a nice bearish crown formation on the 1H. My target is down at 130 there about.

  • PipWolf

    Dachelm, that’s exactly right. Open two positions that are worth 0.5% of your account each. One position will target pt1, the other pt2. Both will have the same s/l. Generally, when pt1 gets hit and closes out the first half of the trade, we adjust the second trade so that the s/l is at the original entry value. Overall this locks in profits from the first half and creates a risk-free trade for the second. Hope this helps.

  • Dachelm

    Yes, that helps a lot PipWolf.

    Thanks

  • cadarkitek

    I’m in a trade in the opposite direction, reason is because this pair broke the up trend line and has retrace to test it forming a nice bearish crown formation on the 1H. My target is down at 130 there about.

  • Pipster4lyphe

    Would anyone be able to say which platform ‘Cyclopip’ use.
    This info would be greatly appreciated. Also, any more views on this pair?

  • PipWolf

    Dachelm, that’s exactly right. Open two positions that are worth 0.5% of your account each. One position will target pt1, the other pt2. Both will have the same s/l. Generally, when pt1 gets hit and closes out the first half of the trade, we adjust the second trade so that the s/l is at the original entry value. Overall this locks in profits from the first half and creates a risk-free trade for the second. Hope this helps.

  • Dachelm

    Yes, that helps a lot PipWolf.

    Thanks

  • Pipster4lyphe

    Would anyone be able to say which platform ‘Cyclopip’ use.
    This info would be greatly appreciated. Also, any more views on this pair?

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