Today's pick will be on the EURJPY again, but this time a little trickier. I drew a fib line on the 4hr chart and as you can see we have a couple of resistance points lining up; most notably the 61.8% fib and the S1 line.
In the morning we have the E-12 PPI and ECB interest rate statement. Now I am looking to go long at 137.88, but if the PPI is a big surprise or if Trichet is soft on his stance on the short term outlook on interest rates I will take my long trade off and go short with a break and candle close below the S1 and fib line. Going for 10 pips either way with a 30 pips stop. My aggressive target would be the pivot point in the long direction or the S2 line in a short play. I know initially, it's a bad risk to reward ratio, but I think it's a high probability trade in either scenario.
If the pair goes long I'm looking for a reversal at the R1 line. Short at 138.87 with a 10 pip profit target and 30 pips stop. Again if the news is a big surprise and causes a strong move then take the short trade off and look to go long.
Today's pick isn't really a "set it and forget it" trade, so you'll have to be alert during those news times of 5:00 am EST and 7:30 am EST.
Buy EURJPY @ 137.83
SL @ 137.53
PT1 @ 137.93
PT2 @ 138.23
Short EURJPY @ 138.87
SL @ 139.22
PT1 @ 138.77
PT2 @ 138.38
SL = Stop Loss; PT1 = First Profit Target; PT2 = Second Profit Target
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- Pick of the Day: EUR/JPY 20:29 21 February 2006