Cross-Eyeing EUR/GBP – Trade Closed

Trade Closed: 2007-10-11 22:20

Well, the Euro rallied across the board and the Pound fell on surprisingly weak housing data. We saw rare volatility out of the pair as it shot higher to hit our short entry and then the stop out soon after.

Total: -37 pips

Trade Idea: 2007-10-10 20:50

crosseyed chart

Good evening! Time to bounce back from a frustrating trade with a short idea on EUR/GBP.

Bank of England Governor King recently announce that they would not cut rates to bail out lenders and “do whatever is necessary” to fight inflation. This knocked out the idea of a rate cut in the UK in the near term and the Pound has strengthened since.

Meanwhile, Eurozone leaders are still concerned with the effects of a high Euro, especially as growth is appearantly slowing.

So, the Pound has been on a tear against the Euro and as we can see on the chart, the pair is pulling back a bit from the downtrend. I’d like to short at the 38% Fib retracement area, which I think it will reach before turning back lower. Here’s our trade idea:

Short EUR/GBP at .6943, stop at .6980, pt1 at .6900, pt2 at .6865

Please remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly. Also remember that the value per pip on a 100K lot is about US$20.

Good luck!