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  1. #1
    Administrator Martin Kay's Avatar

    Hot New Tips by Richard - EUR/JPY, len Weekly and Monthly Expiry 25-31/03/13 !!!

    Richard's weekly market outlook is here! The new week started with final agreement between Cyprus and European Union which includes taxation on all deposits bigger than 100k EUR. Check Richard’s tips and find what is heading for this week!

    1. As a trader you are always looking for the most significant potential for a price move at any given time, and at the moment the situation in Cyprus means that this potential for volatility can be found in the EUR/JPY (given that it is a much less liquid pair when compared to the EUR/USD). Obviously, I am not interested in getting into a position before the necessary information is made public, so I will be watching for a downside EUR/JPY break at 121.70 as a trigger for weekly PUT options. To the upside, the level I am watching is 123.40 but I am much more interested in seeing a failure.

    2. To balance risks, for stock trades I will be watching home builder Lennar Corp (LEN), which has twice beaten analyst earnings estimates and has recently broken multi-year resistance levels in the $43 area. I am using this break and the expected increase in home sales next week to enter into monthly CALLS in LEN at $43, looking for a rise above $45.


  2. #2
    Specialist Member RCox's Avatar
    The basis for the LEN trade this week was upside potential in the US Home Sales numbers, which wound up showing mixed results (prices higher, number of units sold lower). LEN did show an initial spike after the data but we are now settling at mid levels for the week. The longer term nature of the trade should still benefit from earnings strength near term, any downside moves here provide an opportunity to get in at lower levels.

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  3. #3
    Specialist Member RCox's Avatar
    121.70 did turn out to be a clear breakdown point for the EUR/JPY, with prices falling directly to new lows just above 120. We are seeing a gradual snap back here (which looks like short traders are looking to capture some profits in volatile markets) and we are now coming back close to the entry point. From a technical perspective, this area should hold as support turned resistance btu even if we do see a break higher, prices should be contained by the downtrend lower highs and the 100 hour EMA (around 122.25 now). If we do see a move into 122.25, this area might be used for short term trades in the dailies section.

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    Last edited by RCox; 03-26-2013 at 08:46 PM.

  4. #4
    Specialist Member LesterK's Avatar
    Thanks Richard for that insight! It looks really there is a clear breakdown in EUR/JPY pair. I am planing to enter a put option here tomorrow when see the actual price action.

  5. #5
    Legendry Member Michael Hodges's Avatar
    Quote Originally Posted by RCox View Post
    121.70 did turn out to be a clear breakdown point for the EUR/JPY, with prices falling directly to new lows just above 120. We are seeing a gradual snap back here (which looks like short traders are looking to capture some profits in volatile markets) and we are now coming back close to the entry point. From a technical perspective, this area should hold as support turned resistance btu even if we do see a break higher, prices should be contained by the downtrend lower highs and the 100 hour EMA (around 122.25 now). If we do see a move into 122.25, this area might be used for short term trades in the dailies section.

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    Thanks for the tips, I always forget to check against pairs other than the ones I watch, the EUR/JPY trade has a lot going for it, dollar strength, euro weakness, yen printing....the list goes on...

  6. #6
    Specialist Member RCox's Avatar
    The 121.70 support turned resistance area has contained prices, so there were two chances to get in on the trade this time. New lows are imminent but we do have a pretty significant long term level at 119.50, so there should be some buyers ready to get back in soon.

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  7. #7
    Active Member
    Quote Originally Posted by RCox View Post
    The 121.70 support turned resistance area has contained prices, so there were two chances to get in on the trade this time. New lows are imminent but we do have a pretty significant long term level at 119.50, so there should be some buyers ready to get back in soon.

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    Yes there should appear some buyers at 119.50 and it is very close now to the current levels of 120.40, so tomorrow probably some rebound will arise.

  8. #8
    Legendry Member Michael Hodges's Avatar
    Euro and JPY based pairs are in for a wild ride over the next 2 weeks I think, especially the EUR/JPY pair. Both central banks are scheduled to meet in the early part of April and the BOJ for one is expected to enact some serious aggressive easing measures that will drive yen based pairs, including the EUR/JPY. The ECB is also meeting in the early part of the month and could make a policy change though it is much less certain... statements, comments and Q&A will be more important with the ECB. As for the eur/jpy pair the weakness in the Euro stemming from contagion fears and the weakness in the yen based on Abe/Kuroda expectations will surely make for a whorl wind of speculation. I can't wait to see what happens!

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