Cross-Eyeing: EURJPY Retracement – Closed Open Orders

Close Open Orders: 2010-06-24 22:29

Sadly, the bears were too aggressive on this one and did not let the pair retrace high enough to reach my entry point. Because the pair has made a new swing low, I need to close any open orders that I have.

Trade Idea: 2010-06-23 23:08

PoD Chart

Seriously, why the heck are euro pairs gaining? Didn’t they see the poor home sales data last night? For some reason, the EURJPY didn’t drop too much, as the euro rose late yesterday. Still, I think traders will find this as another opportunity to short the euro. There’s just too much uncertainty in the markets that I don’t think traders will want to stay in long euro positions for too long.

Looking ahead, I’m hoping for some volatile moves once French consumer spending and industrial new orders data come out. French consumer spending is expected to have picked up by 0.3% last May, while industrial orders for the euro zone is projected to have increased by 1.6%. If these reports come in better than expected, we might see a small pop up in euro pairs.

I’m going to have to keep my eye on core durable goods orders and the weekly unemployment claims data coming out from the US at 12:30 pm GMT. These might prove to be catalysts for strong moves. If durable goods orders fail to hit consensus of a 1.1% rise, we may finally see risk aversion come back into the markets.

My technical setup is a Fibonacci retracement play. As you can see from the hourly chart, price is starting to make its way upwards, which to me, is a good chance to sell at a good price and jump in the forming downtrend.

With stochastics about to hit oversold territory, I am looking to sell at 111.50, just a couple of pips below the 50% Fibonacci retracement level. I will ultimately target the 110.00 handle, but I will make adjustment as the trade goes along since the market has been very choppy. As for my stop, I have placed it at 112.70, above the 61.8% Fib and this week’s open price.

Here’s my gameplan:

Short EURJPY 111.50, profit target 110.00, stop loss at 112.70.

I know you’re all busy watching Wimbledon and the World Cup matches but don’t forget to follow me on MeetPips.com!