EUR/JPY: On Short Alert – Missed Out!

Trade Cancelled: 2012-08-30 22:30

EUR/JPY 1-hour Chart

The idea was correct, but perhaps I was a little too conservative in my thought process. Yes, EUR/JPY did range, but it failed to retest the 99.00 handle. Instead, it found solid resistance at the 98.80 level throughout the week.

I actually thought of being more aggressive and entering around that area once I saw it holding steadily. However, I realized that unless I adjusted my stop loss and made it much tighter, it wouldn’t be worth the reward-to-risk ratio. I decided to sit out and even though EUR/JPY dropped late during the New York session on Thursday, I still feel it was the right decision.

Moreover, with the Jackson Hole Symposium just around the corner, there’s no telling what might happen in the markets. For all we know, all the major central banks will come up with some grand master plan that boosts risk appetite and sends EUR/JPY soaring higher!

So for now, it’s time to sit on the side lines and see what the summit brings us.

Before I go, I just wanna give a shout out to all of you who shared your ideas and suggestions, either through the comment box below or through Twitter, Facebook, and Google+! Keep em’ coming folks!

Trade Idea: 2012-08-29 02:00

EUR/JPY 1-hour Chart

In essence, what I’m looking to trade on EUR/JPY is a simple range play. The 99.00 major psychological handle is a tried and tested level. It held back the euro bulls last week, and I have a feeling it’ll keep from breaking again.

Why’s that? Well, simply because I don’t see any potential catalysts on the calendar today! Europe isn’t releasing any major reports within the next 24 hours and I doubt the Japanese retail sales report will cause EUR/JPY to shoot up.

With that said, I think EUR/JPY will continue to trade sideways and stay between 99.00 and 98.00… at least until late tomorrow (Jackson Hole Symposium) until something major (like new developments in the euro zone) comes up.

Here’s my game plan:

Short EUR/JPY at around 99.00, stop loss 99.40, profit target 98.00.

Like I said, it’s a basic range play and I’m hoping to play it from end to end. Short at the top, exit at the bottom!

However, I do realize that EUR/JPY has been showing a lot of strength lately, so I’m not gonna set orders to sell just yet. I’ll wait for some sort of confirmation – either from candlesticks or Stochastic – before I get short. Also, I’ll only be risking 0.5% of my account on this one.

What do you guys think? Is this something you would trade? I would appreciate your comments and suggestions!

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  • Jamessheppard

    Hi Cyclopip. I am hoping to short this soon. On H4 chart is a nice rising channel I have been watching. As you say 99.00 has been strong resistence though so not sure if it will reach the top of it. What do you think?

    • cyclopip

      Looks like you were right! Have you entered the trade yet? By my charts, it topped out at 98.82. I may reconsider a lower entry.

      • jamessheppard

        I am still not to sure what this pair will do!!! It just keeps hovering around the same level (98.50 and above). I dont think i feel safe entering yet until it breaks either way. Im just worried i will miss the move though! Are you in yet?

  • Nestor

    Agree with Jamessheppard. I am going to go short at 98.8

  • Gorodn

    Looks like it is in an ending triangle of a relatively large 4th corrective wave, which if so the direction is up, targetting a 100.80 for the end of the 5th wave???

    • cyclopip

      Interesting take there! Can you show me a chart so I can visualize, please?

    • FxSniper1

      I doubt this analysis but well… good luck if you long. To me the best long price is in the 97.00 region

  • FxSniper1

    Im properly short already and don’t see much to the upside anymore. In at 98.74 with stop at 99.21 targeting 97.04

    • cyclopip

      Starting to think the same! Looks like this pair’s just gonna chill where it is right now. Ideally, I want a nice entry though, so I’ll wait for it to reach the 98.75-98.80 area.

      • FxSniper1

        well, came down hard. whatever pushed it did so with gusto and I am happy

  • gorodn

    Bullish butterfly just formed, Andrews pitchfork (reasonbly strong) shows turning at 98.155, Gartly shows max down at 98.027. Elliot wave looke like a corrective wave so sometime down. Longer term to me looks like an Elliot corrective wave so it should turn down sometime. I would like to see that before comiting money.

    • cyclopip

      Decided to sit this one out. Too much event risk surrounding Jackson Hole. Are you planning on holding a position over the weekend?

  • fxcalibres

    It just hit 99.0 at went all the way down to arnd 98.5 now. I shorted just at the top while closing the trade on market close.