So far, so good on this EUR/JPY short forex position! Even though price missed my second short order on a larger pullback, I was able to add and press my advantage. But before reading on, make sure you look at my initial trade idea first.
I shorted at market (125.46) with 0.25% risk then set another short order at the 61.8% Fib or 128.40, but price missed this by a few measly pips! I was still snoozing around the time this happened (Hey, monsters gotta sleep, too!) so I wasn’t able to jump in right away when the pair resumed its dive, but I got a chance to increase my risk right around my first short entry.
Since EUR/JPY made yet another sharp dive yesterday, I thought it best to add to my position yet again (0.12% risk) while trailing my stop on all positions to my latest entry at 125.25. This leaves me with a 0.05% gain on my first position, breakeven on my second position, and 0.12% risk on my last entry for a total of 0.07% on the line and a 0.27% lead so far.
I’m thinking that this pair could have room to head further south because the ECB minutes revealed that policymakers considered a much larger stimulus injection in last month’s rate decision, which suggests that they sill have some easing firepower left in their arsenal. Meanwhile, the Japanese yen seemed unstoppable in its climb as traders tried to push the envelope despite intervention threats from government officials.
It looks like risk aversion is very much in play these days, especially with global growth concerns, Brexit fears, and the looming Greek debt deadline keeping markets uneasy. Still, I’ll be playing this trade extra carefully as sentiment can shift on a dime, and I might consider closing entirely before the weekend. Make sure you’re following me on my social media accounts for instant updates and don’t forget to check out our risk disclosure!