This is short explanation of my vision (more information and full analysis are available - contact me via email). This is one of the best fundamental based trades nowadays. The Euro is overbought, Yen is sold heavily (I refer to CFTC Report). It gives the possibility of collapse of demand / supply for these currencies. The United States is going to raise interest rates in the future, which will translate into an increase in market risk in the future. This will be the main factor that will result in the closing of short positions on the japanese Yen and it will increase pressure to sell pairs with the japanese Yen in the background. The Euro is currently not in a certain inflationary situation, especially core inflation is muted. The tone of the European Central Bank's statement is now positive, because the bank does not want the Euro to fall too fast. As investors or traders, we have to be able to predict the future in some sense and try to position ourselves before Mr. Market will notice what is going on.
Remember to invest consicously, pay attention and be aware all the time, have a good Risk:Ratio reward, control your feelings and emotions... and good luck! :)
@lu1977hk, Hi, as we can see, the price has gone up, but the global situation in my opinion has not changed - the price for eurjpy is overbought, the euro has the highest commitment of leveraged funds on the long side and I do not think that it would last indefinitely - the euro is discounting future hikes, and as soon as these increases take place, there will probably be big drops for the euro against what the market will think then. Same as yen, it is oversold and the increase in risk in the markets will result in closing short positions and reversal. The probability of decline is greater than the probability of further increases, and these increases - if occur - should also be limited. Ultimately, the price can do anything, so we're ready for it too.
DavidFXMarkets
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@lu1977hk, Risk-off today and closing short positions at JPY :) Perfectly bounds from box monthly and 88,6% fibs. We want to invest in such options where probability is on our side and the potential for profit is greater than the potential for loss.
Mairita
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Hmmmm,do you think today was the sl hunting? Works out perfectly regarding your chart.
DavidFXMarkets
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@Mairita, Yes, but the Market is constantly changing, therefore you must know what you are going to achieve, how you want to achieve it. Successful speculation or investing is based on two factors: probability of the move (to the downside or to the upside) and risk-to-reward (how many you will earn if you're right and how many you can lose if you're not right. You have to know where is risk - what means you have to know what is going on globally, not only in the one or two currencies). Technical analysis will not tell you were the price will go in the future, because the future price is based on gossip and guesses what could happen in that future... So you have to know more than Mr. Market knows - this is your advantage, your edge... This is only my very, very small explanation.. Good luck :)
DavidFXMarkets
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@Mairita, Risk-off today and closing short positions at JPY :) Perfectly bounds from box monthly and 88,6% fibs. We want to invest in such options where probability is on our side and the potential for profit is greater than the potential for loss.