Trade Review: EUR/JPY Fibonacci Pullback

To avoid weekend risk, I’ve decided to close this EUR/JPY short position last Friday but I’m still open to re-entering.┬áIf you’re wondering what I’m talking about, make sure you look at my initial idea and my latest trade adjustments.

There were a lot of factors that pushed this pair to sell off last week, including jawboning from Japanese officials and dovish ECB minutes. These convinced me to add to my position while the downtrend was gaining traction, especially since I only had 0.25% on the line after price missed my second short order. Later on, I trailed my stop slightly below entry and added to my position again while maintaining my level of risk.

EUR/JPY 4-hour Forex Chart

EUR/JPY 1-hour Forex Chart

However, price seemed to pull up from its dive just before testing the swing low near 122.00, as profit-taking took place. I saw this as a sign that market participants are starting to unwind their risk before the weekend in case the BOJ or the Japanese government makes a surprise announcement then.

Because of that, I decided to cut my exposure as well and exit my trade early. Because of my last short position right around the bottom of the selloff, I ended up giving back some of my gains but I’m still happy with the 0.11% that I was able to pocket from this. In retrospect, I probably should’ve risked a much smaller amount on my latest position.

Here’s how it turned out:

Shorted EUR/JPY at 125.46, 125.25, and 123.25 for an average entry of 124.65.

P/L: +52 pips / +0.11%

As I’ve mentioned earlier, I’m still open to re-entering this trade, particularly if risk sentiment continues to favor the lower-yielding yen. Stay tuned for my next updates!

Q1 2016 Trading Performance Review
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