Cross-Eyeing: EUR/GBP – Close Trade

Close Trade: 2008-11-21 07:55

Not too long after my post, EUR/GBP tested .8350 again and found enough buyers to push the pair all the way to .8500. It looks like that was the top as sellers pushed the pair all the way back down to .8400 this morning.

With the end of the of the Euro session, and week, coming up I’d like to close out the trade to avoid weekend even risk.

Close trade at market (.8395).

Total: +45 pips/ +0.26% gain

Pretty frustrating to watch a 150 pip gain turn into a 45 gain, but a gain is a gain, right? I should have expected resistance at .8500 as it is a psychological level, so a lesson learned for future trades.

Thanks for checking out my blog, have a great weekend and I’ll see ya next week!

Trade Idea: 2008-11-19 15:04

crosseyed chart

It’s usually more fun to watch paint dry rather than watch EUR/GBP, but it seems the credit crisis has brought some life to this pair – and some nice trading opportunities.

There may be a swing trade opportunity in the works as the pair continues to retrace as much as 50% of the very volatile move from around .8150 to .8650. Stochastics are creeping higher indicating the move lower may be a bit overdone. Time to return to the uptrend?

Fundamentally, it’s still the same old story as we continue to see global weakness and possibly more interest rate cuts from both the ECB and the MPC. It’s speculated that the UK will get hit the worst and with more room to cut in interest rates, we may see further declines in the Sterling against the Euro.

I’m looking to go long the pair, but I’m going to see if we get a bit more pullback to .8350

Long EUR/GBP at .8350, stop at .8180, pt1 at .8520, pt1 at .8690

Remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly.

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  • cmlb

    great set up.. joined you!

  • mramer

    “It’s usually more fun to watch paint dry rather than watch EUR/GBP”..

    LOL…. you are 100% right, this pair is usually straight line pair.

  • mramer

    is this story below a game changer?


    02:10 GBP/USD: Could Get boost From FT Report On Corp Tax Change Sydney, November 21: The FT is reporting today that KPMG is predicting that UK Chancellor Darling will announce a tax exemption for foreign dividends received by British companies. A survey by KPMG found that 70% of the UK”s biggest businesses would repatriate cash if the changes were announced in Monday”s pre- Budget report.
    The move would likely give the GBP a boost due to anticipated GBP buying flows at a time when the currency has been under heavy pressure. The GBP/USD is trading around 1.4755 after trading down from 1.4835 late in the US session when a weak close on Wall Street sent JPY-funded carry trades lower. Hourly support has formed around 1.4710/15 while hourly resistance comes in around 1.4840. The GBP/USD trades 1.4752/57. –John.Noonan@thomsonreuters.com

  • MaoriPip

    While it would be nice to see this one play out this pair may work itself into a range (like it usually does). I like your analysis though and hope that this pair doesnt revert back to its normal lull. Not one of my favourite pairs to trade but I like where you are going with this one.

  • cmlb

    great set up.. joined you!

  • mramer

    “It’s usually more fun to watch paint dry rather than watch EUR/GBP”..

    LOL…. you are 100% right, this pair is usually straight line pair.

  • mramer

    is this story below a game changer?


    02:10 GBP/USD: Could Get boost From FT Report On Corp Tax Change Sydney, November 21: The FT is reporting today that KPMG is predicting that UK Chancellor Darling will announce a tax exemption for foreign dividends received by British companies. A survey by KPMG found that 70% of the UK”s biggest businesses would repatriate cash if the changes were announced in Monday”s pre- Budget report.
    The move would likely give the GBP a boost due to anticipated GBP buying flows at a time when the currency has been under heavy pressure. The GBP/USD is trading around 1.4755 after trading down from 1.4835 late in the US session when a weak close on Wall Street sent JPY-funded carry trades lower. Hourly support has formed around 1.4710/15 while hourly resistance comes in around 1.4840. The GBP/USD trades 1.4752/57. –John.Noonan@thomsonreuters.com

  • MaoriPip

    While it would be nice to see this one play out this pair may work itself into a range (like it usually does). I like your analysis though and hope that this pair doesnt revert back to its normal lull. Not one of my favourite pairs to trade but I like where you are going with this one.

  • cyclopip

    Thanks for the comments everyone! mramer – I don’t know if it was a game changer, but we certainly saw Sterling in control after the pair hit .8500…doh!

  • cyclopip

    Thanks for the comments everyone! mramer – I don’t know if it was a game changer, but we certainly saw Sterling in control after the pair hit .8500…doh!