Trade Closed: 2007-02-22 17:25
It looks like it was all about the carry trade today as the Yen continued to sell off through out the day against all the of the majors. Our position in EUR/JPY kept going up, but unfortunately, we were short on the pair. So, we were stopped out for a minor loss of -48 pips.
1st half: -33 pips
2nd half: -15 pips
Total: -48 pips
Trade Idea: 2007-02-22 09:15
EUR/JPY is looking a bit oversold at the moment as it has made a run up from 156.21 and now finding resistance at 159.00. It may be time for traders to take some profits off the table. From here we may see a retracement back down to 158.50 before carry traders jump back on the boat.
On the chart, we see resistance from 159.00 as the pair has touched it twice before. RSI and Stochastics. Fundamentally, we saw weak components in German GDP and a better than expected Japan Trade Balance, so there is a short-term bearish bias on the pair right now. So here’s a short trade idea:
Short half position EUR/JPY at market (currently 158.92), stop at 159.25, pt at 158.55
Short half position EUR/JPY at 159.10, stop at 159.25, pt at 158.80
Remember to never risk more than 1% of your account on any single trade, so please adjust your position sizes accordingly.
Good luck and good trading!