Trade Closed: 2008-07-31 11:29
1st Half: +40 pips
2nd Half: +40 pips
Total: +1.0% gain
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Trade Adjustment: 2008-07-30 10:09
Adjust stop on remaining position to .7880. Continue to target .7840.
Trade Update: 2008-07-29 17:45
Trade Update: 2008-07-28 09:48
The pair has taken a dip after hitting an intraday high around .7930, so far so good. No major news for the rest of the today’s session but be on the watch out for UK credit data tomorrow, along with German CPI.
Trade Idea: 2008-07-25 00:04
Good Evening! Yesterday’s weak UK retail sales data hurt the Sterling against the Euro, but it pushed the pair back up to a rising trendline that was broken this week. Another great opportunity to short EUR/GBP???
As we can see on the chart, the pair is back up to the trendline, which also happens to be around a 50% retracement from the swing move from .7975 to .7840. It looks like t rally has stalled for now, leading me to think buyers are out of supply and sellers are ready to take over.
Fundamentally, we know the UK is experiencing a slowing economy, which has been priced in for a while now, but is it time to start thinking the ECB must pay attention to growth as well? Can they shift their focus away from inflation? With oil and commodities falling in recent trading sessions, this may be the case and traders may have to reverse their bullish bias on the Euro and price in that the ECB cannot remain hawkish on inflation forever.
I like a short trade on the idea that support has ossibly turned to resistance and that momentum may have shifted to the downside (the positive interest rate differential is pretty good too). This retracement to the 50% level may be a great opportunity to short, but I think I’ll wait until the 61% Fib is hit. So, that’s what I’m going to do:
Short at .7920, stop at .7960, pt1 at .7880, pt2 at .7840
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