Close Trade: 2007-05-31 08:24
It looks like sentiment has changed intraday as the pair was unable to break resistance at 2.4250. Ahead of this morning’s economic events I would like to all open positions at market (currently at 2.4225). I will continue to watch this pair an look for another re-entry point to go long.
Total: +25 pips
Trade Adjustment: 2007-05-31 07:00
Our order to go long GBP/CHF at 2.4200 was triggered yesterday and we’ve seen some rollercoaster action around that level as the pair has moved throughout the Asia/Euro trading sessions. Within the last hour the pair has shot up to a current bid price around 2.4250.
We will trail this move by moving our stop from 2.4160 to 2.4210 to lock in a small profit and create a risk free trade. It looks like the pair is gaining momentum as traders return to higher yield as hoped, so we will adjust our profit target from 2.4270 to 2.4300.
Good luck and stay tuned for updates!
Trade Update: 2007-05-30 15:10
So, the FOMC Meeting Minutes barely caused a stir as the Fed kept their statement pretty much the same saying economic “growth slowed” and inflation “remained” elevated. We saw a little bit of volatility, but pretty much ended where we started ahead of the report. So, here’s our trade idea for our earlier analysis:
Long half position GBP/CHF at 2.4200, stop at 2.4160, pt at 2.4270
Remember to never risk more than 1% of your account on any single trade. Please adjust your position sizes accordingly.
Trade Idea: 2007-05-30 12:20
Good afternoon! It’s the end of May and thought I’d squeeze in one last trading opportunity that I have been watching. Right now I am watching GBP/CHF for a possible reversal in its current downtrend. We all know that carry trades have been unwinding after China raised the stamp tax on securities transactions, and it looks like equities are still taking a hit as we speak.
Is this another opportunity to jump in cheap as it was back at the end of February, when we last saw China equities make a correction? I think so. It looks like equities and bonds are taking a minor hit, but we do have event risk at 2:00 pm EDT (FOMC Meeting Minutes) which may explain the lack of volatility at the moment. Even so, I think the market still has a risk appetite and will look to jump back into carry trades when this correction blows over.
Technically, the pair is trading around the 240 MA’s and a psychological level of 2.4200 (also the 61% Fib level of the last uptrend swing). So, I’m betting GBP/CHF may find support here, but because of how wide this pair trades we will limit our risk to half our normal trade size.
For now, no trade idea ahead of FOMC minutes. This event can have an affect across all currenices. I will post entry and exit levels after this event. Stay tuned!