USDJPY and EURUSD: Post Non-Farm Trading Update

Hey everyone!

We had an exciting day today with the Non-Farm announcement! USD (while many were expecting bad news) delivered a VERY positive result and sent the US Dollar searching for new highs.

We have 2 trades that are affected by this announcement.

The first is a Long USDJPY trade that we had been patiently holding for several days expecting the huge base aroun 117 to hold and also thinking that the USD strength would win out over the JPY.

That trade was, of course, significantly helped by the strong news for USD. We went from a break-even position, to +165 pips in no time.

Here’s where we stand on that trade now:

(click to enlarge)

USDJPY_Long_Trade_Feb_5_Non_Farm

We have a small bit of profit locked in and are looking for a bigger target on this trade (will trail the stop tighter next week when the structure rebuilds).

 

The second trade was one that we entered because of the Non-Farm announcement.

After great news for the Dollar, we didn’t over-think it too much… We just thought “I guess we should be shorting EURUSD…Again”

click_to_tweet_eurusd_short

But, of course, it was already too late to simply jump into the trade.

The EURUSD had already shot down without us.

So we set up our channel and waited for a break and retest. See here:

(click to enlarge)EURUSD_Non_Farm_1

 

Our first position is a smaller size short on the retest of the bottom of our channel.

We feel there is a pretty good possibility that the EURUSD will correct higher into the channel though so we’ve set a higher Sell Limit at about the mid-way point.

In this image, you can see the full set up of the trade, including the price levels:

(click to enlarge)EURUSD_Non_Farm_2

 

You may notice that no take profit has been placed and that is on purpose.

We’ll use a trailing stop on this trade (like the USDJPY) because we feel that it’s possible that the EURUSD could crash through the recent lows and we don’t want to limit our profit potential.

More than likely, our trailing stop will get knocked out before that happens, but we want to keep the potential on the board. 

Every so often we get rewarded by leaving the profit potential wide open and it is WELL worth it, so we’re doing the same thing here.

If we can even re-test the daily low at 1.1090, the trade would Net about $1,900 USD with the single position and would Net around $6,000 USD if both positions are filled.

By the way, you can see why we like the scaling in approach when you consider the $1,900 profit potential compared to almost $6,000. 

Of course, if we do crash through the lows, that number quickly compounds! (fingers crossed!!!)

It should be noted that our risk is around $2,000 on the trade. For us to lose that $2,000 the second order will have to be entered though, meaning that the risk to reward is quite nice on this particular trade.

So, those are the trades we have going on as the week comes to a close. 

Let us know if you are doing anything similar, maybe the exact same, or completely different.

Regardless, thoughts and comments are welcome!

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  • Tim Cameron

    One other thing I want to add and I will drop it, because I don’t want to take over Casey’s thread……when you look at your charts, look to see who would lose the most money and be hurt the worse if prices break….strong sentiment in one direction usually means they will be the ones most damaged, that’s how Commercials make their money…not riding out a trend with the retail traders……they roll them over to make profits………

  • Tim Cameron

    Yep, I am not buying Euro, I am waiting to sell at a bargain vs trying to jump in against the commercials after a long long run to the downside with no retracements……the number 1 major error retail traders make, is they do not trade at bargain prices, they wait to long to sell and they wait to long to buy….nothing goes straight up, and nothing goes straight down…….buy and sell off retraces, trading continuations (especially after a long run) is account suicide

  • NathanTucci

    I am selling JPY also… But regardless, I am out of that trade with +170 pips or so and now just holding my EU short which I love because of the overwhelming trend and the strong fundamentals for USD

  • NathanTucci

    It’s been stated that SOME institutions have bought long term Euro, true, but I still don’t want to fight the overwhelming trend we have seen of late. USD continues to pack on strong fundamentals, so it is the safest bet to ride on in my opinion… I expect higher highs for EURO at some point, just not sure that is this week. +75 pips on the EU short so far.

  • Warburg™

    Hold it. JPY: was constantly sold by commercials and no relevant bids. So being its bias south the north move was a combined affect of a bot USD and As Tim Cameron notes Major degree ABCD is likely completed. All the expiring at 118 118.30 118.50 119 were wiped out. And this is a fact. We are delta adjusted on it by 0.20 so we just waith 1 more week. EUR: We do not BUY it. We just sell any and every strenght. The move it ain’t over. We have experienced a weak reaction to 1.13100. 1waiting 1.13025 to be taken out. lot of space, the train isn’t too full

  • SS

    I was wondering the same? Can you please explain us? Tks.

  • Ron

    How do we see the direction the Commercial Traders are trading?

  • Tim Cameron

    As far as Euro/USD, Commercials have now flipped Long Euro..only retail traders are short…..be careful..as we know, most retail traders lose money….I am looking for higher highs for Euro pairs and will then look to go short after the commercials get all the retail traders money. Nothing is ever 100% sure, but I find following Commercial traders leads to more profits than following the retail side……

  • Tim Cameron

    On a larger degree the USD/JPY is Probably only completing a wave D of a triangle….I had 3 positions open on it and 2 on the Euro/JPY at the time of the NFP….this impulse to the upside USD/JPY will not exceed 120.75 area and will probably stall soon near present levels and fall for a Wave E since we have no more major fuel for the fire in economic announcements for a few days. 10% profit on my account was enough, I closed all trades as we peaked in the low 119’s USD/JPY…I will let the fall for wave E happen with no trade until risk is palatable using the wave C low as a stop loss and add on aggressively as we break out of the triangle for a torrid thrust up to 122+…. Good Trading Casey ETAL…Tim