EUR/JPY Short Trade Pending

[B]My picks:[/B] Looking to Sell EURJPY on Close Below 132
[B]Expertise:[/B] Fundamentals Combined with Technicals
[B]Average Time Frame of Trades:[/B] 1 Day - 1 Week

With the threat of risk aversion still alive and well in the markets, I’m looking to sell rallies in the JPY crosses. Yesterday I said that I wanted to sell [B]EURJPY[/B] on a failure to break the 50% fib at 131.99, which has served as former support on 5/26, 5/27, 6/23, and 7/6. However we’re seeing no signs of failure at this point as US equities are up sharply. With there being such high event risk on hand over the next few days (FOMC minutes this afternoon and Q2 earnings from JPMorgan on Thursday and from Citigroup and Bank of America on Friday), I would only sell the pair on a close below 132.00. If this does not occur today, I will look for a failure at 133.12 (61.8% fib).

There are two levels I’d look to target: the 200 SMA at 127.10 and the psychologically important 125.00 mark. Stops should be placed according to preferred risk/reward levels.