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Intraday Trading Review [April 7-8, 2010]

by Rafael Rosa on April 9, 2010

japanese yen cartoon Intraday Trading Review [April 7 8, 2010]

The Yen is all over the place these days. The Greece issue has created quite some volatility as risk-aversion snaps back and forth from the market. All in all, more volatility means more trade opportunities.

The massive selling of the EUR/JPY and GBP/JPY crosses (and the other Yen crosses too) took a pause during the Thursday European session and then rebounded sharply. As the dust settled in regard to Greece, some traders seemed took some profits off the table while some were going long.

Has anything regarding Greece changed?

No. The details of the Greek bailout are still not out. The only thing we know is that Greek bond yields are through the roof and an inverted yield curve is forming. As Jean-Claude Trichet would probably say, it’s “very, very bad”.

Back to the Yen crosses, I believe we still have some more downside to go. From a technical perspective, the EUR/JPY seems the like the weakling of the Yen crosses. The Greece rumor/news made the pair retrace¬† 50% of the 121-128 run. The 100 SMA has crossed down over the 200 SMA and the trend seems to be down. Unless we get some major buying or good news to flip the momentum, it’s hard to see 128.00 anytime soon.

Additionally, the EUR/USD has not managed to close above the 1.3400 zone ,which is putting a lot of overall downward pressure on the Euro.

Looking at the hourly EUR/JPY chart does not create a lot of upside hope:

eurjpy cross over 2 Intraday Trading Review [April 7 8, 2010]Zone A in the chart shows a strong consolidation area in the hourly chart. This will likely act as strong resistance at the 125.00 level. The B Arrow shows how the momentum in the EUR/JPY  is turning to the downside as the 100 SMA crosses over the 200 SMA to the downside. The 100 SMA will likely catch up with the pair and act as further resistance. Lastly, Arrow C shows that the RSI has crossed the 70 level to the downside which also adds to a potential sell-signal.

On the other hand, the EUR/JPY daily chart does create some hope for the pair. As we can see below, yesterday’s daily candle left a long bullish wick. Therefore, it seems like we may have buyers at these levels. We’re also getting higher lows and higher highs on the daily (Which is not the same for the EUR/USD. And remember, if the EUR/USD plummets, the EUR/JPY will likely follow suit).

eurjpy daily 2 Intraday Trading Review [April 7 8, 2010]

The outlook for the GBP/JPY looks a little brighter, but it seems to be catching up to the EUR/JPY outlook on the hourly. Arrow A shows how momentum seems to be turning to the downside as the 100 SMA looks to cross down over the 200 SMA. Arrow B also shows the trendline that has also been holding the pair down. The trend line may be the factor that holds the pair down until the moving averages start to point down. The RSI also indicates that the pair may be overbought in the very short term.

gbpjpy cross over 2 Intraday Trading Review [April 7 8, 2010]

The daily chart on the GBP/JPY looks very bullish. The price has rejected any downside momentum four times in a row. It seems like all we need is some good news from the UK for this pair to shoot upwards.

gbpusd daily 2 Intraday Trading Review [April 7 8, 2010]

Overall, I would be shorting the EUR/JPY before shorting the GBP/JPY.

Lastly, the selling from the past two days could have just been a corrective move before shooting higher. It’s a coin toss that you get to decide: corrective move vs. reversal.


And here are the trades that were posted (and closed) on StockTwits and Twitter Monday and Tuesday, as of 11 PM Eastern Time:

Short AUD/JPY from 86.54 closed at 87.02 for -48 pips

Short GBP/JPY from 143.16 closed at break-even for 0 pips

Short EUR/JPY from 125.46 closed at+76 pips

Short CAD/JPY from 94.00 closed at 93.30 for +70 pips

Short EUR/JPY from 125.85 closed at +115 pips

Short AUD/USD from .9110 closed at .9155 for -45 pips

Long USD/CAD from 1.0020 closed at 1.0033 for +13 pips

Long GBP/JPY from 142.23 closed at 142.75 for +52 pips

Long EUR/JPY from 124.96 closed at 125.32 for +36 pips

Long EUR/USD from 1.3348 closed at 1.3354 for +6 pips

Short AUD/USD from .9284 closed at.9264 for +20 pips

Short GBP/USD from 1.5232 closed at 1.5260 for -28 pips

Long CAD/JPY from 92.72 closed at 93.00 for -32 pips

Long GBP/JPY from 141.88 closed at141.75 for -13 pips

Short USD/CHF from 1.0745 closed at 1.0770 for -25 pips

For a total profit of 388-191= 197 pips; total for the week: 197-74 = 123 pips

So, we’re back in the green for the week.

Currently in the books: Short NZD/USD from .7062, short EUR/JPY from 125.00, short CAD.JPY from 93.09, short AUD/CAD from .9288 & .9218, and long USD/CAD from 1.0021

Technorati Tags: Currency Trading, eur/jpy, eur/usd, euro dollar, euro yen, fx trading, gbp/jpy, GBP/USD, japanese yen, performance, pound yen, trading review, usd/cad, yen crosses

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