Euro / Japanese YenShort
Use the ECB meet to sell EURJPY rallies
Updated
Trade set up – Our preference is to sell rallies in EURJPY, placing a limit order at 128.30. With implied volatility spiking, predominantly in global equities, the JPY has strengthened, and we believe it will continue to do so, as traders flock to the guru of all safe haven currencies. Should the trade be filled, we would target 126.75, placing stops set at 128.75 (20-SMA dynamic resistance can be used too).
Why we like it - With the JPY strengthening against all major currency pairs and the VIX index spiking to the highest close since February, we see risk appetite falling, which should result in further downside in EURJPY. Global equities have continued their decline, and it seems support levels mean very little here, and this is having the clear knock-on effect in FX, increasing uncertainty and moving traders to JPY.
Tactically, there are risks of a small upside tick in the EUR with the ECB monetary policy statement coming later today, but we don't see Draghi changing his trajectory when it comes to QE and policy. With that in mind, any rallies are a selling opportunity as we ride the trend and leverage to elevated volatility.
Disclaimer.
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment. Pepperstone Group Limited is licensed and regulated by the Australian Securities and Investments Commission (AFSL 414530). Pepperstone Limited is authorised and regulated by the United Kingdom Financial Conduct Authority (FRN 684312). This information not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation
Why we like it - With the JPY strengthening against all major currency pairs and the VIX index spiking to the highest close since February, we see risk appetite falling, which should result in further downside in EURJPY. Global equities have continued their decline, and it seems support levels mean very little here, and this is having the clear knock-on effect in FX, increasing uncertainty and moving traders to JPY.
Tactically, there are risks of a small upside tick in the EUR with the ECB monetary policy statement coming later today, but we don't see Draghi changing his trajectory when it comes to QE and policy. With that in mind, any rallies are a selling opportunity as we ride the trend and leverage to elevated volatility.
Disclaimer.
Trading leveraged products carries a high level of risk and may result in you losing substantially more than your initial investment. Pepperstone Group Limited is licensed and regulated by the Australian Securities and Investments Commission (AFSL 414530). Pepperstone Limited is authorised and regulated by the United Kingdom Financial Conduct Authority (FRN 684312). This information not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation
Trade active
Limit order triggered. We have moved our stop to break even and will continue to keep an eye on price action and macro to determine the appropriate exit.Trade closed: target reached
As per the original trade recommendation, our price target on EURJPY has been reached(TP - 1.2675) and therefore, the trade has been closed.
Global risk Warning CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading in CFDs. You should consider whether you understand how CFD
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