EUR/JPY currency pair is one of the most traded forex pairs, mostly known for its profitably volatile movements. However, the recent global economic turmoil, led by the falling oil prices and Chinese stock market crash, has put the said pair to a tricky location. It is, therefore, quite important for EUR/JPY followers to plan their risk management strategy.
According to FXHQ’s forex analyst Cory Mitchell, traders can still take out a decent profit from the pair’s aggressive movements, considering they have their stop loss placed at the right locations. In his September’s technical analysis of EUR/JPY, Mitchell recommends traders to consider his chart before planning their near-term trades. Here is the copy of that chart:
Mitchell rests his analysis on the price movements throughout April and May, saying that a similar action is still in play on the daily chart. Meanwhile, the August “triangle” is further acting as the pullback/slowdown.
“Within this triangle there is a downward bias, marked by the lower swing highs and lower swing lows,” he adds. “The drop to 132.23 in September could be viewed as a false breakout below the prior triangle lows. Since the triangle is quite large–about 500 pips between current support and resistance (about 750 pips at its widest point)–it deserves the focus right now.”
Traders are recommended to read the complete analysis, available at this link. They are also recommended to follow Mitchell regularly to stay updated with the minute-to-minute details of EUR/JPY, and other trading pairs.
Once again, it is very important for EUR/JPY traders to place their stop losses before they think of earning any profit. We recommend Method 311 Manual Forex Trading Strategy — crated by Donna Forex — to calculate the exact positions of the stop losses. The topic can be found easily on internet.