Good morning! My trade was triggered shortly after I posted my trade idea as my short entry orders at 131.00 were hit in the afternoon US trading session.
Slightly better than expected Japanese GDP numbers gave the Yen a boost during the Asia trading session and it was enough to hit my first profit target at 130.00. I closed my first profit target to lock in some profits and adjusted my stop on my remaining position to breakeven.
Unfortunately, there were enough buyers at 130.00 to push EUR/JPY back up to my breakeven point and stopping me out of the trade.
1st Half: +100 pips
2nd Half: +00
Total: +0.50% gain
I still hold a short bias on the euro, so I will continue to look for short opportunities in the euro crosses and watch EUR/JPY to see if sellers can hold 131.00 – 131.50. Stay tuned!
Trade Idea: 2009-05-19 13:26
Good afternoon! I’m watching a technical trade forming on EUR/JPY. It appears the pair has stalled its rally at an area of previous support and resistance. Will sellers hold out and win this battle?
On the four hour chart, I have highlighted the area of previous support and resistance with the blue boxes – roughly around the 131.50 area. The pair has already risen to the 61% Fibonacci area and bounced lower, and with stochastics indicating overbought conditions and that buyers are out of juice.
We continue to see risk tolerance rise in the global markets as lending gets easier and that it appears the worst is behind us but is it really?
My friend Jack Crooks writes in his blog a couple of days ago how the eurozone, Germany in particular, are in trouble as their recession has the potential to be larger than the US.
This could be bad news for the euro if we see the ECB take on quantitative easing measures to fix the EU economy. Of course, we will just have to wait and see if that plays out, and IF the market even cares about fundamentals by then.
So, for now, I am taking a technical short play on EUR/JPY as the charts and indicators are telling me there is a good chance resistance may hold. I think I can get in at a better price than 130.71, so here’s what I’m going to do:
Short EUR/JPY at 131.00, stop at 132.00, pt1 at 130.00, pt2 at 129.00
Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.
We have plenty of data for the rest of the week, so be sure to check out our calendar to stay on top of the news! Stay tuned!
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