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The idea was correct, but perhaps I was a little too conservative in my thought process. Yes, EUR/JPY did range, but it failed to retest the 99.00 handle. Instead, it found solid resistance at the 98.80 level throughout the week.

I actually thought of being more aggressive and entering around that area once I saw it holding steadily. However, I realized that unless I adjusted my stop loss and made it much tighter, it wouldn’t be worth the reward-to-risk ratio. I decided to sit out and even though EUR/JPY dropped late during the New York session on Thursday, I still feel it was the right decision.

EUR/JPY 1-hour Chart

Moreover, with the Jackson Hole Symposium just around the corner, there’s no telling what might happen in the markets. For all we know, all the major central banks will come up with some grand master plan that boosts risk appetite and sends EUR/JPY soaring higher!

So for now, it’s time to sit on the sidelines and see what the summit brings us.

Before I go, I just wanna give a shout-out to all of you who shared your ideas and suggestions, either through the comment box below or through Twitter, Facebook, and Google+! Keep em coming folks!

Trade Idea: 2012-08-29 02:00

EUR/JPY 1-hour Chart

In essence, what I’m looking to trade on EUR/JPY is a simple range play. The 99.00 major psychological handle is a tried and tested level. It held back the euro bulls last week, and I have a feeling it’ll keep from breaking again.

Why’s that? Well, simply because I don’t see any potential catalysts on the calendar today! Europe isn’t releasing any major reports within the next 24 hours and I doubt the Japanese retail sales report will cause EUR/JPY to shoot up.

With that said, I think EUR/JPY will continue to trade sideways and stay between 99.00 and 98.00… at least until late tomorrow (Jackson Hole Symposium) until something major (like new developments in the eurozone) comes up.

Here’s my game plan:

Short EUR/JPY at around 99.00, stop loss 99.40, profit target 98.00.

As I said, it’s a basic range play and I’m hoping to play it from end to end. Short at the top, exit at the bottom!

However, I do realize that EUR/JPY has been showing a lot of strength lately, so I’m not gonna set orders to sell just yet. I’ll wait for some sort of confirmation – either from candlesticks or Stochastic – before I get short. Also, I’ll only be risking 0.5% of my account on this one.

What do you guys think? Is this something you would trade? I would appreciate your comments and suggestions!

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