Some risks are worth taking, and I think this trade is proof of that!
It was a risk on my part to take this trade considering I already had a long euro position in my EUR/CHF trade, but the technical and fundamental setup on EUR/JPY was just too good to pass up!
So as you can imagine, I was thrilled to see that this trade went my way… though it wasn’t exactly smooth sailing all throughout!
I got quite a scare soon after I entered my trade as the pair dipped back below the 102.00 handle for a few hours. (Yeah, monsters get scared, too… especially when there are pips on the line!)Luckily, it recovered and delivered the strong rally that I was hoping to see.
The announcement that Greece had agreed to the Troika’s harsh austerity requirements helped my trade a bit, and so did the ECB’s rate statement.
ECB President Mario Draghi confirmed that the eurozone is showing signs of stabilization and that “substantial” downside risks are starting to disappear.
But what really got this pair flying was the broad yen weakness that we saw yesterday. Euro strength + yen weakness = perfect conditions for my trade!
I’d like to hold on to this trade a while longer, but I also don’t want to expose myself to unnecessary risk by keeping this trade open over the weekend.
Unlike with EUR/CHF, EUR/JPY doesn’t have a clear line-in-the-sand level that the central bank is keen on defending so I think EUR/JPY is more vulnerable to downside shocks.
That being said, I decided to close this trade at a profit:
Closed manually at 103.02: +72 pips / +0.45%
As for my long-term EUR/CHF trade, I’ve decided to move my stop loss on it to breakeven. I’ll give you guys a full update on that one next week!
That’s all for now. Thanks for following! I’ll catch y’all on the other side of the weekend, fellas!
Yesterday was absolutely MONEY for euro pairs, thanks to some rumors flying around the markets regarding the Greek debt deal.
Apparently, Greek officials were rumored to be a step closer towards drafting an agreement that would appease the Troika (EU, ECB, and IMF).
We also received news that the ECB would be making concessions over its Greek debt holdings, effectively reducing the debt burden and making it easier for Greece to receive the 130 billion EUR bailout that it so desperately needs.
In addition, we got a rather positive statement from Euro Group leader Jean-Claude Juncker, who said that Greece cannot be forced out of the eurozone, as it would be too costly.
This sent euro pairs flying up the charts, with EUR/JPY breaking past 101.00 and running all the way up to the 102.00 MaPs!
Now that it seems as if a Greek debt deal is just around the corner, I think traders will be less hesitant to buy euros. With that said, I think it’s time to crank up the long euro positions, and this time around, I’ve got my eye on EUR/JPY!
The pair just made a solid, bullish candle close above 102.00, which could be a sign of another rise up the charts. If you take a look at today’s Chart Art, where Big Pippin pointed out resistance at 102.00, you’ll notice that there’s a cup and handle chart pattern in the works.
This pattern usually precedes a strong bullish move, and now that price is above 102.00, I feel like it’ll only rise higher!
I decided to buy at market (102.30) and set my stop at 101.50. I think that will give my trade enough room to breathe should we see any wild moves later today.
Long EUR/JPY at market (102.30), stop at 101.50, profit target to be determined.
I’m undecided as to where I’ll place my profit target, but I think if a Greek deal gets passed without any hitches, it could lead to some risk-taking, which should benefit my trade.
Also, since I still have a long EUR/CHF trade, I decided to scale down my risk a bit by putting only 0.50% on the line with this trade. The two pairs are somewhat correlated, and I don’t wanna get burned should we see a strong anti-euro move in the market.
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