Introduction:
After last December's US economic uncertainties (US-China trade wars and US government shutdown), JPY played its role as the world's safehaven currency and rallied back to its mid 2017's levels. Since January this year we've been witnessing an indecision as to whether it'll continue its move downwards or pullback to its previous 130.000 levels on the
EURJPY
. Price was strongly rejected from 127.500 and bounced up from 123.500, as such downwards move was also fueled by a substantial EUR dump. Even though this was nourished by both currencies' behaviour, it failed to create a higher low and thus confirmed the suspicions that we now face a ranging market, instead of a strong trending one. Price usually follows the path of least resistance, so a bounce from the same 127.500 level is expected, as it'd take strong news/big volume to break the resistance. And the support, for that matter. We trade what is usually more likely to occur, and with the best risk/rewards involved.
What we see in the charts is a failed bearish wedge (broken by weak JPY news) and the lower trendline is possibly creating an upwards channel alongside the superior dotted, unconfirmed trendline. Most recently, price is struggling between a thin, narrow 40 pips range for almost a week. It could continue that way since we have very long Japanese holidays coming up. RSI is diverging and creating new lows at the same price levels, indicating a possible higher high to its 80 levels or, if it breaks downwards now, a continuation move down.
How to Proceed:
Our team has already opened a short position on this level, with 3 additional scaling orders from 126.8 until 127.5. A hedge long was opened, and it will be closed should price break below the 126.3 level and it has a 45 pips trailing stop-loss attached to it.
Take Profit:
Our take profit targets are 126.000,125.000, 124.000. They can be dynamically changed, i.e., according to live price action, should circumstances change. The arrows and horizontal levels are great indicative, though.
Stop-loss (Invalidation of Analysis):
Our stop-losses here are between the 127.600 and 128.000 range.
Side-notes:
Please keep in mind that the markets have been reacting strongly to news these days, specially on smaller majors, such as the NZD and the AUD, which could create instability and affect
EURJPY
by correlation and arbitrage moves. We are trading the whole forex system here, not only a pair. These positions should be watched closely.
Please leave your comments below to inspire us to continue our work and don't forget to follow us! Have a great trading session!
After last December's US economic uncertainties (US-China trade wars and US government shutdown), JPY played its role as the world's safehaven currency and rallied back to its mid 2017's levels. Since January this year we've been witnessing an indecision as to whether it'll continue its move downwards or pullback to its previous 130.000 levels on the
EURJPY
. Price was strongly rejected from 127.500 and bounced up from 123.500, as such downwards move was also fueled by a substantial EUR dump. Even though this was nourished by both currencies' behaviour, it failed to create a higher low and thus confirmed the suspicions that we now face a ranging market, instead of a strong trending one. Price usually follows the path of least resistance, so a bounce from the same 127.500 level is expected, as it'd take strong news/big volume to break the resistance. And the support, for that matter. We trade what is usually more likely to occur, and with the best risk/rewards involved. What we see in the charts is a failed bearish wedge (broken by weak JPY news) and the lower trendline is possibly creating an upwards channel alongside the superior dotted, unconfirmed trendline. Most recently, price is struggling between a thin, narrow 40 pips range for almost a week. It could continue that way since we have very long Japanese holidays coming up. RSI is diverging and creating new lows at the same price levels, indicating a possible higher high to its 80 levels or, if it breaks downwards now, a continuation move down.
How to Proceed:
Our team has already opened a short position on this level, with 3 additional scaling orders from 126.8 until 127.5. A hedge long was opened, and it will be closed should price break below the 126.3 level and it has a 45 pips trailing stop-loss attached to it.
Take Profit:
Our take profit targets are 126.000,125.000, 124.000. They can be dynamically changed, i.e., according to live price action, should circumstances change. The arrows and horizontal levels are great indicative, though.
Stop-loss (Invalidation of Analysis):
Our stop-losses here are between the 127.600 and 128.000 range.
Side-notes:
Please keep in mind that the markets have been reacting strongly to news these days, specially on smaller majors, such as the NZD and the AUD, which could create instability and affect
EURJPY
by correlation and arbitrage moves. We are trading the whole forex system here, not only a pair. These positions should be watched closely. Please leave your comments below to inspire us to continue our work and don't forget to follow us! Have a great trading session!
Trade active:
Following very bearish PMI news, EURJPY moved strongly down. Our first target was hit in the blink of an eye and we already took 120 pips of profit. Trade is still active and we will watch closely price action's interaction with the trendlines.
Trade active:
2 targets already reached. A hedge long will be opened following price action, but we are still overall bearish.
Trade closed: target reached:
All targets were reached. 230 pips caught here. Nice trade, guys.
