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The Weekly Update
We would like to begin by covering the weekly market update we published last week. The New Zealand Dollar (NZD) was our prime focus as we expected moderate losses in EURNZD. We have shifted our protective stop to the entry and realized a minor profit before the price reversed and triggered our stop loss. We are in a decent profit in our Natural Gas long trade at the time of this writing.
Outside market events such as increased tension between Russia and Ukraine, US military actions against ISIS in Iraq are expected to continue affecting XAU/USD, which has so far benefited from safe-have flows.
EURJPY Technical Analysis
trap in multiple JPY pairs and crosses. The technical chart appears to provide a long entry as key indicators dip into oversold territory with a hint of positive divergence. However, the monthly chart suggests the Japanese yen may strengthen against a basket of currencies over the medium term. Of course, EURJPY may gain for several days and then retrace lower and it is still inline with the monthly outlook.
EURJPY Daily Chart
Click on the chart to enlarge:
Our technical models suggests a trap is begin set up to lure in virgin hogs into the market. We have calculated our the Risk Ratio (RR) and it meets our standards. It is essential to highlight the Japanese yen is expected to strengthen against a number of currencies. We have only selected EURJPY in order to limit our market exposure in the Forex market,
Our bearish entry would be at market price, protective stop layered at 137.49, targeting 134.50.
As a precautionary step we limit our analysis to Euro-yen due to mixed technical signals in multiple instruments. We will update our trade alerts throughout the week when an intraday entry is provided in order to minimize our market exposure. We suspect the technical trap will dent many investments.
Key Economic Figure
We believe Thursday’s data will have the biggest impact on global markets. The German Preliminary Gross Domestic Product (GDP), following Italy’s confirmation of a technical recession is expected to be the key economic figure for the upcoming week.
EURJPY short trade will be updated when necessary at the bottom of this page.
12/08/14 UPDATE: EURJPY is trading at 136.75 at the time of this writing. Out short trade is in a minor profit, no action taken,
12/08/14 UPDATE II: EURJPY is trading at 136.83 at the time of this writing. We are aware of the reversed H&S on the 4hr chart but we fail to negate our bearish outlook. We are closing 20% of the trade at market price and may add the realized funds at a higher price if the H&S will be confirmed by breaking above the neckline at 137.01.
12/08/14 UPDATE III: EURJPY is trading at 136.49 following the German ZEW Economic Sentiment. We are closing 15% of the open trade at market price.
13/08/14 UPDATE: EURJPY retraced to our entry at the time of this writing, posing a risk of affirming a reversed H&S. We are maintaining out bearish outlook and believe the German Prelim GDP is the key economic data for our short trade.
15/08/15 UPDATE: EURJPY was stopped out in today’s session. We were able to minimize the loss by realizing partials when the trade was in a profit.
Trade alerts are also issued in the weekly update.