yesterday, i posted an initiating short trade on eur/jpy in mytrade. the reason i like this is that the pps indicator threw a sell signal on eur/jpy near the top of its 52 week range just as my seasonal projection study (sdi_seapro5) is showing a consistent seasonal downturn in this pair is due. here's my chart:
i plan my entry to be a small retrace into the body of last weeks candle and will hold into the fall. the target is a retrace to the midlevel the 52 week range, around 110. this is a 10 yen retrace or 1000 pips (note: yen crosses all have a 1/100 yen pip because 1 yen is the smallest unit of currency in the yen.)
mind the carry-trade. the carry-trade is, supposedly, the interest rate differential between the two countries of the pair and is applied to a currency trade during the daily mark-to-market rollover. surprisingly, this can be asymetric, penalizing one side of the trade more than it is rewarding the other side, and this is the case for eur/jpy - while short eur/jpy does not pay so much on the carry (like 1cent per mini per day), the long eur/jpy side of the trade is disproportionately penalized on the carry (~50cents and more per mini per day.) this creates a catalyst for short eur/jpy, imho.
on the thinkorswim platform you can see these daily rollover rates in the marketwatch tab. i look at the columns marked long p/l and short p/l - these are the actual amounts paid or deducted from a currency trade on a particular day. index backward on a pair you are interested in and see if there are any asymetries between long and short that are persistent over time.