EUR/USD and AUD/JPY Trade Updates

Forex Trade Updates: 2014-05-26

Before I consider some of the new setups worth watching this week, here’s a brief recap of the trades I currently got going on.

Before you move on, for those who are not familiar with my framework, signals, setups, or acronyms, please visit my discretionary trading framework blog.

EUR/USD: Euro to Move Lower on Potential Easing?

EUR/USD 4 Hour Chart

EUR/USD 4 Hour Chart

After holding onto this trade for a bit of time, EUR/USD finally made another small leg down last week to nearly test 1.3600.  Before the weekend, I share on my Twitter and Facebook pages that I moved my stop to 1.3655 to lock in profits to avoid weekend risk.This doesn’t give me much room to breath now, but with the ECB interest rate meeting coming up soon I feel like volatility will slow down for the euro and that I should be looking to exit soon.

Keeping it open but having a tight stop in place that locked in profits allows me to catch any surprise moves lower ahead of what is likely to be a cut in interest rates from the European Central Bank. I’m still targeting the 1.35 area and beyond and I’ll readjust to lock in further profits if I’m fortunate enough to see a further move lower.

AUD/JPY: Doing a Flip On AUD/JPY

AUD/JPY 1 Hour Forex Chart

AUD/JPY 1 Hour Forex Chart

Flipping to a short position after trying to go long was a tough call, but the right one as I saw changes in Japanese data and RBA rhetoric, and the price action to support the sentiment shift in both the Yen and Aussie.

I don’t think the story has changed much since entering the position, but as we head towards the end of the month I think there’s a good chance volatility will slow down this week.  This means it’s likely I’ll be holding this trade for another week before we see any real direction, given that we do not see any economic or geopolitical shocks.

Of course, if volatility picks up and breaks above potential resistance at the Fibs and 200 moving average, I’ll shut down the trade ahead of my max stop.  If it does go my way and nears my target before the end of the week, I’ll look to take a profit to clear out the books and reassess for the end of the month.  Stay tuned!