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Trade Closed: 2013-10-29 3:30 ET

I closed my long EUR/JPY trade for a small gain after the pair failed to break 135.00 and on some recent yen strength.

EUR/JPY 1 hour chart review
EUR/JPY 1 hour chart review

I’ve got the one our chart above (with this week’s updated lines to watch) to show recent price action.  It looks like sellers are back in control after a failed retest of 135.00 and broad yen strength we’re seeing amongst the majors.  For me, it looks like the market may now be in favor of the yen, or may be going into consolidation mode.  Either way, it looks like the strong trend higher may be over for now, which is why I closed manually at 134.48.

Total: +26 pips/ +0.15% gain

The broad yen strength seems to be coming from recent positive Japanese data (employment and consumption data), which lessons the probability of additional stimulus from the BOJ.  This is a short-term game changer, but I’ll still be watching EUR/JPY closely to see if 135.00 breaks or if 133.00 – 134.00 is retest and holds.  Until then, it’s watch mode for now, especially on currency pairs like EUR/AUD and GBP/NZD.  Stay tuned!

Trade Idea: 2013-10-23 4:15 ET

Got a sweet trend setup on one of my favorite pairs to trade forex: EURJPY! Is the Asia session pullback a chance for more bulls to jump in?

EUR/JPY trending higher.
EUR/JPY trending higher.

EUR/JPY has been trending for the past couple of weeks, and it looks like that trend may continue higher on positive risk sentiment currently propping up the markets. This is on the idea that the Fed won’t taper, keeping the same level of liquidity pumping into the market beyond 2013.

At the moment, we are seeing risk-off flows thanks to fresh speculation that China may tighten. This sparked a jump in China’s money-market rates, and a big, broad Yen rally. Since it’s only speculation, I feel this will have a short-term effect, actually giving me a better price to jump in the uptrend. With the market testing the broken resistance area (also Fibs) I decided to go long at market. My stop is below the Fibonacci retracment area and my target is the recent swing high. Here’s what I am doing:

Long half position EUR/JPY at market (134.22), stop at 133. 40, profit target at 135.50

Remember to focus on the process, manage yo risk through correct position sizing, and don’t forget to journal everything you do!

With this trade structure, it’s a little over 1.50:1 potential return-on-risk with only 0.50% risk. I could be wrong that the Chinese rate news is short-term speculative, but if not and the market moves higher I may add to my position if it goes my way.

What do you guys think? Will the trend higher continue on after this pullback? Leave comments below!

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.