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.
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
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.