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Last week I had a short play on EUR/JPY that didn’t pan out too well. In hindsight, it was definitely a good idea to go short, but on a longer term basis with a wider stop. So, we’re going to jump back into this pair, hoping we’re getting in at the beginning of a larger move. Now, I like a short play here for a few reasons.

  1. The COT report has been showing an extreme oversold position on the Yen for a few weeks now. All the sellers are in the market, so who’s left to sell?
  2. In price action, we’re seeing lower lows, and a strong break of a previous support level.
  3. The better than expected Capex report (18.4% versus a consensus of 15.0%) sparked a rally in the Yen, which may continue as traders come back from holidays and vacations to bring liquidity to the market.

So, here are a couple of short ideas, and since I may turn these into longer term trades I will have a wider than usual stop.

Short EUR/JPY at 149.10, stop at 149.50, pt1 at 148.90, pt2 at 148.50

Short EUR/JPY at 148.30, stop at 148.60, pt1 at 148.10, pt2 at 147.80

We do have event risk at 4:00 am EST and 5:00 am EST with the release of Euro PMI and Euro Retail Sales respectively. Please be very cautious and stick with the stops recommended.

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.