Close Trade: 2009-01-15 10:15
It’s been a bumpy ride for my trade as the pair rallied after my original post, only to find resistance around 119.60. Since then, EUR/JPY has fallen back to previous support levels around 117.00 on risk aversion sentiment as the global economic climate looks to worsen in the coming year. Also, we just saw the ECB cut rates to 2.00% as expected, and while there was a short pop higher back above 118.00 after the news, the Euro fell once again after Trichet signals that there will be more rate cuts.
I have decided to close my trade out as it seems risk aversion sentiment is the larger factor in price action in the short term.
Close open short position at market (116.73).
Total: -192 pips/ -0.72% loss
So, it looks like there were no buyer/profit takers to give EUR/JPY a little bit of retracement. I took a minor hit to start off the year, but it is always better to cut losers short and live to trade another day. Stay tuned as I may put on a reverse trade if the pair breaks out lower.
Trade Idea: 2009-01-13 23:39
Greetings everyone! Got a basic technical setup on EUR/JPY as the pair seems to find some buyers at a previous support level. Will buyers hold out and push the pair back higher?
I have the daily chart up on EUR/JPY and it looks like the Euro sell off against the Yen has stalled at a previous support level around 117.00. With stochastics indicating the pair may be oversold in the short term, we may see sellers jump out of the downtrend and buyers push the pair back up. I have the Fibonacci retracement tool up to pick out points of possible resistance and profit targets.
Before I go into my trade, a quick look at the calendar shows that we don’t have much in the way of major news events for the Eurozone or Japan until Thursday with the ECB interest rate decision. This means we may see technicals and risk sentiment play out until then.
I’m going for a short term, range play on EUR/JPY, but with reduced risk as it is a countertrend trade. My stop will be a wide 265 pips – the average daily range.
Long EUR/JPY at market (118.65), stop at 116.00, pt1 at 121.30, pt2 at 123.95
Remember to never risk more than 1% of a trading account on any single trade. Always adjust position sizes accordingly.
So, I’ve a got a quick technical play that I may close ahead of the ECB interest rate decision. Stay tuned!