Big reversal higher in EUR/JPY start the week that had me making moves to lock in a profit. What had the market jumping?
After entering short on a test of a previous strong resistance area, EUR/JPY made a sweet run lower last week, mainly on a round of global risk aversion last week sending traders to safe haven assets like the Japanese yen.
This week is a different story with the pair rocketing higher, likely on the combined reaction to positive developments to the never ending Brexit situation, as well as a bullish reaction to comments from European Central Bank members that traders took as cues for a rate hike coming down the road.
These new developments seemed like major short-term game changes for the pair, especially given the bullish reaction as the pair popped from a low just around 129.50 to touch 131.00 by Monday afternoon in the U.S. At that point, I decided to avoid a winner turning into a loser by rolling down my stop to 131.55 (just above the latest swing Fibs), which was triggered in the Tuesday morning London session after a pop higher:
Total: +45 pips/ +0.09% gain on 0.50% risk
Since closing, it looks like sellers took back control to send EUR/JPY lower than my close price at the moment, so it looks like I probably closed too early. Or maybe I should have closed much, much earlier in the Monday session for a bigger profit?
I think the latter move would probably have been the smarter thing to do given the catalysts, but one thing I wanted to work on was letting winners run, which is why I kept it open. Time will tell if it was the right move.
So now, I think I’ll step away from my EUR/JPY short bias with so many bullish factors in play right now. Of course, there are other setups floating around that I will share soon….until then, stay tuned, good luck and good trading!
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