Euro to Fly on EUR/JPY? – Trade Closed

Trade Closed: 2013-07-26 04:50

EUR/JPY Chart

So much for soaring higher! Even though EUR/USD bounced back late in the New York session to establish a new daily high, EUR/JPY didn’t quite follow suit. Instead, EUR/JPY sank through all the Fibonacci support levels and hit my stop loss!

As it turns out, what we saw was actually a dollar sell-off across the board. Not only was this evident in EUR/USD, but we saw a huge drop in USD/JPY as well, which led to the yen rallying across the board.

This just goes to show that even though I love trading the cross-currency pairs (non-USD pairs), I can’t ignore the Greenback because any strong dollar moves can have major repercussions in the forex market!

Trade closed at 131.30: -80 pips / -0.50%

Pretty rough week for me. Not only did I get wiped off the canvas with this trade, but I also missed out on an awesome AUD/CAD move thanks to some strange spikes. Nevertheless, as my favorite coach, John Wooden, always said, “It’s okay to be disappointed, but never be dejected!” That said, I’m gonna take this time over the weekend to recuperate and reenergize myself for the busy week next week! Peace out homies!

Trade Idea: 2013-07-25 02:00

Lookie what we have here — we’ve got major confluence at the 132.00 handle and a bullish divergence to boot! I think it’s time to buy this pair!

EUR/JPY Chart

Yeah, that’s right, homies! EUR/JPY sellers seem to be struggling at the 132.00 handle. And to tell you the truth, I ain’t surprised – this was a solid resistance level in the past, and it’s also in the same area as the previous week high and Fib levels. So from a technical standpoint, EUR/JPY looks like a good buy right around now.

Fundamentally, I see the good things for the euro as well. Yesterday, we got word that euro zone manufacturing and services PMIs beat forecasts across the board. In fact, the composite output index hit a fresh 18-month high, leading many to believe that the region’s recession has finally come to an end.

It’s not every day that we hear news from the euro zone as upbeat as this, so I think this may have a more lasting effect on the euro and continue lifting it higher. As for Japan, there’s nothing important on the calendar coming out before the weekend, so there’s no foreseeable catalyst for any wild moves for the yen.

With that in mind, I didn’t think twice about jumping in at market.

Here’s how I set it all up:

Bought EUR/JPY at market (132.10), stop loss at 131.30, profit target at 133.50. Risking 0.50% of my account.

I set my stop just below the previous low, with the week open serving as another potential support level. Meanwhile, I’m aiming for the top WATR, which is right around the area of the highs of late May.

So there you have it, fellas – my trade for the week! Share your thoughts and suggestions below and let’s get a discussion going!