- Scalping - selling EURJPY and USDJPY rallies
- Short EURJPY (1/2) from 127.70, Stop at 128.20, Target 1 at 125.00, Target 2 at 123.50
- Short EURUSD (1/2) from 1.3340, Stop at 1.3420, Target 1 at 1.3260, Target 2 at 1.3175, Target 3 at 1.3065.
- Short USDJPY (1/2) from 95.40, Stop at 96.20, Target 1 at 94.00, Target 2 at 92.55
- Exited Short EURUSD (1/2) from 1.3340 at 1.3390 for -50-pips
Typical Time Frame: 1-day to 1-week
I cut my EURUSD short in half today as there simply wasn't enough downside pressure ahead of the Fed meeting - the USDJPY upswing that I've been waiting for produced pullbacks in other USD-based pairs (see:GBPUSD), but not the EURUSD. This is a testament to the Euro's relative strength right now, which I expect to fade soon once focus shifts away from the Fed, given the uptick in Italian and Spanish bond yields in recent weeks (likely concern over reduced stimulus to support risk taking).
I've initiated two long JPY trades this evening, having been triggered short in the USDJPY and the EURJPY at 95.40 and 127.70, respectively. The fundamental basis for these trades is that the Fed will underwhelm on Wednesday, that is they won't cut QE3 by as much as is currently being anticipated. You can read my thoughts on the Japanese Yen this week here, and you can see various iterations of my thoughts on the Fed meeting here and here. My original technical gameplan for the USDJPY leading into the Fed and thereafter can be viewed here.
I also host a weekly Live Trading Q&A in DailyFX Plus, on Tuesdays at 07:15 EST / 12:15 GMT, in which I delve deeper into my positions and thought processes behind my analyses.
--- Written by Christopher Vecchio, Currency Analyst
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