Decided to close my short position in EUR/JPY as the pair retests a major support area. Here’s a quick review!
EUR/JPY Resistance & Reversal?
Last week, I decided to scale into a short EUR/JPY position as the pair test a potential resistance area, playing my fundamental idea that European data will worsen and risk sentiment will likely once again swing negative as the global economy slows due to the coronavirus pandemic.
Fortunately for my trade, I was able to get into both of my short orders before the pair dropped this week, once again on negative risk sentiment related to the coronavirus situation. The latest catalyst was a change of sentiment from the U.S. administration as their outlook shifted to a likely ‘very painful two weeks’ ahead. We also got the latest PMI data from Europe, showing a sharp contraction in March to put pressure on the euro today.
This brought the pair down from the 120.00 handle to easily retesting the 117.00 area, which has been a major support area in March. With only another 30 pips to my max target, I decided to not risk losing my quick gains so I closed the full position manually at 117.12:
Total: +284 pips avg. / +1.64% gain on 1.00% max risk
This was a good trade, and probably the only other thing I could have done differently was to add more to the position when it broke below and retested the minor support area around 118.80. But since I wasn’t monitoring the trade during that time, I don’t think there’s anything I could’ve done about that.
Anyways, what do you guys think of how I handled EUR/JPY? Should have I added more and rolled down my stop instead of closing out? Let me know in the comments section below!
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