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EUR/JPY To Face Resistance at 121.95?

The information, including Commentary and Trade Ideas, provided on FX360.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. Global Forex Trading and FX360 .com is merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. Any projections or views of the market provided by FX360.com may not prove to be accurate.

Last updated 2/26/2010 7:56 PM EST (GMT -5) 0 Comments - Add your comment

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Bradley W. Gareiss

Technical Analyst, GFT

A short term bearish butterfly pattern is forming on the EUR/JPY 15min Chart.  This trade has excellent price symmetry, but we have to make the time symmetry works out.  If the the pair gaps up, be very careful because this could indicate upward momentum.  It is risky to have this trade on because the pair could rapidly rise on the open, so do not leave this trade over the weekend.  However, this would be a good trade if the pair moves up slowly to the entry.  The trade would also enter at 38.2% of Y1A and 78.6% of Y2A.

We are looking the sell the EUR/JPY if it rises to 121.95 (Point D).  Point D is located at the convergence of the following points:

We will now go over what to watch for assuming the pair continues rising towards our entry at 121.95.  First, we need to watch how quickly CD completes.  We are looking for the CD leg to rise slowly and enter the trade near where we have drawn the hypothetical entry.  If there is a gap or there are long bars near the completion of the CD leg, we will not take the trade.  Also, if the pair comes within 8 pips of reaching our entry, does not enter, and reaches 121.47 before entering, the trade is invalid.  The trade is also invalid if the pair falls below 120.80 before hitting our entry.

To recap, we will look to sell the EUR/JPY at 121.95 with our stop placed at 122.19.  Our initial profit target is 121.59 (38.2% of CD).

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  • 2hr Chart - Trade would enter near 38.2% of Y1Z and 78.6% of Y2Z.
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  • 15min Chart - Bearish butterfly; sell at 121.95.

The information, including Commentary and Trade Ideas, provided on FX360.com should not be relied upon as a substitute for extensive independent research which should be performed before making your investment decisions. Global Forex Trading and FX360 .com is merely providing this information for your general information. The information and opinions presented do not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of their trading to their personal risk appetite. Any projections or views of the market provided by FX360.com may not prove to be accurate.

The views of the authors and analysts are not necessarily those of Global Forex Trading, its owners, officers, agents or other employees. FX360.com and the currency research team will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained on FX360.com. Global Forex Trading and the currency research team do not render investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be sought.

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