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A strong run lower for EUR/JPY since getting in short, so it’s time to reduce my risk & lock in a small gain–especially with positive risk sentiment news hitting the markets!

130.00 Still Resistance on EUR/JPY?

EUR/JPY 4-Hour
EUR/JPY 4-Hour

Once again, EUR/JPY made a fast move lower from the 130.00 handle, likely on speculation of further dollar strength and rising borrowing costs after last week’s FOMC meeting (hinting that rate hike is still likely in December) and sparking another round of risk-off vibes around the globe.

The pair was able to trade down to just above the 127.50 handle, making this trade a pretty good winner at over a 1:1 R:R, but we saw a rally this week from that area, likely on news and sentiment that a Brexit deal could be right around the corner and on positive risk sentiment as the U.S.-China trade talks are set to resume.

Both events are very bullish for EUR/JPY, but as we’ve seen in the past, geopolitical events can shift quickly and EUR/JPY bears could take control quickly.

Of course, I don’t know what the future holds in either situation, so I will make a quick adjustment to prepare for a pop higher if positive vibes continue or if geopolitical developments once again turn sour. Here’s what I’m doing:

Rolled stop down from 132.00 to 129.50 to lock in small profit
Watching for another break below 128.00 to potentially increase my size and roll down stop further.

With this plan, I’ve reduced my risk to a small gain if the market continues higher, and if we see a break below 128.00 & the swing low on a strong catalyst and momentum, I’m looking to add to my position to maximize my potential gain.

125.00 (the Summer 2018 lows) is still my max target, but if we do get a situation that bring around strong global risk aversion sentiment (e.g., U.S.-China trade talk failures, Brexit deal failures, Italian budget negotiation failures, etc.) then I’ll likely keep my profit target open ended.

Stay tuned for future adjustments, and remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.