Just a quick update on our Cross-Eyed trade. At the moment we are currently 35 to 40 pips positive and the market is consolidating as traders are patiently waiting for the ECB interest rate statement set to be released at 7:45 am EST. We will keep our stop at 1.5925, but remove the new order to add another lot short at 1.5910. We have event risk and I do not want to take on unnecessary risk by adding another lot.
Again, I’m hoping for a drop in a “buy the rumor, sell the fact” trade scenario. The rate increase is currently priced into the market, so we may see a drop after the statement, especially if Trichet’s statement is less hawkish or if the ECB’s outlook on inflation and growth is weak. We’ll see how tomorrow goes…Stay tuned!