After finding some footing yesterday, the Euro fell once more, all the way to 1.2150 or so. This is the lowest level in four years, and, apparently EUR dragged many other currencies for a ride with it. Again, the Yen and the Dollar where the beneficiaries. Especially JPY. For the Euro, important support at around 1.2330 or so (the low from 2008 sell off), didn’t hold. One could reasonably expect that the market will reach 1.1600, providing that psychological obstacle of 1.2000 is broken. And if most recent developments are any guide, Yen pairs should follow.
The way JPY crosses are behaving reminds me so much of the summer sell off in 2007, and then the big one of 2008. The prices seem to be gaining speed as if rolling down hill. As a matter of fact this is happening right now, as I’m writing this. If things unfold the way they before, we are in for much more down trend with even more furious swings. What we have seen so far could be termed only the “beginning”. However, at this point it is only speculation on my part, not analysis.
I just got out of some Yen trades, on this move during Asian session, minutes ago, after this post was started. One was a little sooner, CAD-JPY short, which has been discussed here recently. Following failed trade (small loss) yesterday, I was looking for a price build up to maybe as high as 91.00 and try to sell on candlestick reversal using 4H chart. Here is what happened.
Market didn’t make it quite t0 91.00, but close enough. Once the bearish engulfing line formed, it was time to sell, with entry at 89.48. Objective was at 88.00 – just reached. At this point I’d like for the price to bounce back a little, for a few hours at least, and probably try to reenter if new lows are made.
As mentioned before, for the other Yen pairs, breakouts on the downside were signals to get in. AUD-JPY made a move at 79.93, or rather I made a move then. Just got out at 78.00. Very good trade. Can’t do proper analysis at the moment, since everything happened minutes ago, but Yen crosses will be covered here more in near future, expecting more downside. The other trade mentioned yesterday, short AUD-CHF is currently under way. More on that in the next post.
Mike K.
By now I shouldn’t be surprised, but how did you mange to get out of these trades right at the end of the run? Aud/jpy musy be 2-3 pips from the bottom. Very impressive!
How about a trading course, Mike? Are you going to write one or not? How soon? Can’t wait!
GR, my target was 78.50, but since I was watching the action, it was cancelled and I let run. 78 became exit because I simply decided it was enough. For that move.
Lila, very flattering, but don’t know yet. No time.
[...] two of those pairs – AUD-JPY and CAD-JPY. Timing has proven to be correct for shorting them, with good results so far. Yesterday I had no time to post an update, but mission remained the same – selling Yen [...]
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