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Trade Invalidated: 2013-01-11 00:50

Phew! Talk about dodging a bullet! It’s a good thing I stayed on my toes for this trade… Otherwise, I would’ve been blown out of the water!


Two things led to my decision not to sell EUR/JPY as it tested the 115.00 handle yesterday:

  1. I didn’t like the way the pair was flirting with resistance at 115.00 so early in the day. Not only that, but it also stalled just below the major psychological level, which made me think that it was gearing for a breakout.
  2. I didn’t want to risk holding the position open during the ECB statement.

And as it turns out, it was a great decision to keep my hands in my pockets! Even though he didn’t announce a rate cut, Mario Draghi seemed happy with the euro zone’s recent “improvements,” which led the markets to believe that risks to the economy have decreased a bit.

I know, I know – I’m as surprised as you are! But it appears as though the ECB is finally seeing some positive signs from the economy. Bond yields are falling, inflationary threats are dying down, and were seeing more stability in the markets.

Anyway, this led to a massive rally on EUR/JPY (over 300 pips yo!), and destroyed the falling trend line that I had pointed out.

To be honest, I sort of have mixed feelings on how this all turned out. On one hand, I’m glad I was able to make sense of the market’s cues and avoid a loss. But on the other hand, I wish I had been able to take advantage of such a big move. Oh well… I hope you guys were at least able to milk this trade for some pips. Til next time, this is Cyclopip signing off!

Trade Idea: 2013-01-09 02:39


Just last week, I discussed why I was rather bearish on the yen. And while I still maintain this overall stance, I do think there is room for a potential correction, especially since we’ve seen such a strong up move across yen crosses.

After all, every pair needs a breather after rising over ONE THOUSAND pips in just over few months, right?

That said, I’m willing to take a chance on this potential short setup on EUR/JPY. The pair seems to be forming lower highs on the hourly chart, and with all the consolidation in the markets right now, I don’t think we’ll see EUR/JPY find enough momentum to trade above 115.00. Furthermore, this level also happens to lineup with a falling trend line, so we could see some interest at that area.

However, instead of just jumping in and setting my short orders at 115.00, I’m gonna stay a little cautious and wait for some candlestick confirmation.

Looking at our economic calendar, I think the major report to keep an eye on will be the ECB interest rate statement due tomorrow during the London session. Most market players are expecting the ECB to stay put, so I think everyone will be keeping an ear out for the accompanying statement, which could provide some clues as to what the central bank plans to do over the first half of 2013.

Do any of you plan on shorting EUR/JPY this week? Or is everyone still scared to buy the yen? Hit me up with some comments down below, homies!

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Weekly Watch: January 7 to 11, 2013
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