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Trade Closed: 2009-09-04 09:30

Good morning and what a morning it is with the US releasing this month’s jobs data. We certainly saw massive volatility after the US reported a loss of 216K jobs in August. Even more importantly to traders, unemployment rose to 9.7%. Yikes!

Again, massive volatility soon after the release and we saw EURJPY drop to 132.00 before rallying up to 133.00 – my short entry levels. I was triggered and after finding resistance just above 133.00, EURJPY fell and hit my first profit target and half of my trade was closed at 132.50.

The market is currently trading around 132.00, and with the long weekend approaching I have decided to take a very nice profit and call it a day.

Close remaining position at market 132.00.

1st Half: +50 pips
2nd Half: +100 pips
Total: +1.5% gain

With traders coming off holiday next week, the effects of today’s jobs number may continue to affect market action. 9.7% is a big factor when trying to gauge a return to economic growth, and while the US is losing less jobs every month, I think traders will start to realize it will be a long time to recover the 6.9 million jobs lost and find jobs for the almost 15 million people that are unemployed in the US.

I expect more risk aversion next week, and hopefully a better price to jump in EURJPY short. Until then, thanks for checking out my blog and have a wonderful weekend!

Trade Idea: 2009-09-02 16:40

crosseyed chart

I have a short term trade idea based on technicals on EURJPY and it may require some potentially potent economic data from the EU to spark enough volatility to trigger it. Check it out!

I’ve got the 1-hour chart up and we can see a few things here. First, the pair is channeling lower, finding support and resistance at the falling trendlines drawn on the chart. Right now, the pair is consolidating between 131.50 and 132.00, indicating the down move may be running out of sellers. If we see a retracement, there may be resistance at the previous support now turned into resistance. I also used a Fibonacci tool to pinpoint some potential resistance levels and it looks like 133.10 – 132.95 may be a good short entry area. If my trade does get triggered, my stop will be above the falling trendline. A break of the falling trendline may signal more buyers to jump in and invalidate my trade.

Of course, I do have to be mindful of the fundies and it looks like we have high level economic data from the Eurozone coming out in today’s Forex calendar. Not only is Eurozone PMI coming out, but more importantly the ECB interest rate decision at 1145 am GMT. Expectations are for the ECB to keep rates at 1%, but of course the potential catalyst for high volatility could be from the following statement from Trichet and company. US data could also have an affect on overall risk sentiment, so be focused and flexible all through out the morning US trading session.

Because of the high level events I am going with a conservative entry point around the 61% Fibonacci retracement area to try to play the falling channel and trend lower. Here’s what I am going to do:

Short EURJPY at 133.00, stop at 133.50, pt1 at 132.50, pt2 at 131.50

Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.

Stay tuned, good luck and good trading! EURJPY Forums Forex Chatroom

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