Pick of the Day: EUR/JPY

Alright kiddies. Today’s pick really isn’t a set it and forget it trade. Tonight the Bank of Japan is coming out with the Interest Rate Statement 11:00 pm EST. Now for those of you who watch our morning analysis know we stay away from the market during big news events. I think only the most experienced traders should trade a market right when a big news event is released. What I like to do is first see if the number being released is a surprise, then wait and see how traders react to it. I usually wait 30 minutes to an hour after the news is release before I even consider entering a trade. During that time frame I’m looking for the pair to whipsaw and then set the trend. Now if the move is strong I look to go long past 141.29 or short past 139.81 and aim for the next support or resistance line. If the move is weak that I look at those points for a retracement or reversal with a 10 pips target. With trades like this I keep a tight stop at no more than 20 pips from those entry points.

Like I said kids, not really a set it and forget it. You’re going to have to watch this one. With everything that’s happening with interest rates here and in the Asian countries I have a feeling traders are going to go long the Yen in the next 24 hours. Of course, I could be wrong, so let’s be prepared either way. Good luck and good trading!