GBPUSD: Range-bound? – Closed Open Order

Closed Open Order: 2009-12-16 21:20

PoD Chart

Argh, I missed out on my cable trade! Well, this is just frustrating. I was really confident with my trade idea, knowing that my fundamental analysis was very much in sync with the technical signals on the GBPUSD chart. Apparently it wasn’t as my technical reading was a bit off. You see, the price climbed to a high of 1.6320 only, missing my short entry order by a mile. What I failed to notice was that the pair was forming lower highs. I could’ve set my entry order a few pips lower had I drawn a shallow descending trend line connecting those highs. Oh well. No use crying over spilled milk, I guess.

Trade Idea 2009-12-15 21:30

Hey everybody! I had a busy weekend since I decided to get started on my Christmas shopping. I love this holiday season because it gives me the perfect reason to go shopping! Don’t you just love going around finding gifts for friends and family? But I have to admit, it was pretty tiring – the mall was packed! It seems like everyone is doing their shopping just now! Maybe that explains why there’s so little volatility in the markets right now…

PoD Chart

We’ve been seeing some tight trading as of late. Some say that this happens during the holiday season when people start to unwind and relax, which leads to less trading activity. With this in mind, I think we could see more ranging in the next couple of weeks. That said, I’ve got a range trade idea on the GBPUSD.

Yesterday, news of Abu Dhabi’s $10 billion bailout support for Dubai World allowed the GBPUSD pair to edge higher. I guess investors became a tad more confident that the UK’s 40% stake in Dubai’s debt won’t vanish to thin air in the next few months. Looking at today’s economic calendar, I noted that the UK RICS house price balance came in worse than expected, which means that the GBP rally might lose steam. Still, upcoming inflation reports from the UK could also have an impact on the GBPUSD price action.

Technically, the pair has been ranging the past couple of days. Notice how strong the resistance at the top of the range is, around the 1.6330-1.6350 region. The price has touched this area four times already and, with today’s relatively light economic calendar, I expect this resistance to hold. Also, with stochastics at overbought territory, the pair could drop down anytime. Since this will only be a day trade, I’ll be sure to close open orders, triggered or not, at the end of the US trading session.

Here’s what I’m going to do:

Short at 1.6350, pt at 1.6200 and stop at 1.6450. Once again, I will risk 1% of my account.

14 comments

  1. gbpeurs

    Yes pound has been trading range bound for almost a week now. To trade this pair I depend on opening price and price action.

    Reply
  2. gbpeurs

    Yes pound has been trading range bound for almost a week now. To trade this pair I depend on opening price and price action.

    Reply
  3. Hucklekiwi PipHuck

    Thanks for your opinions everyone! Well, TalonD, I consider myself a newbie because I am relatively new in this trading business. In fact, my trading experience doesn’t even total to one year… But I guess I am pretty lucky because Pipcrawler, Big Pippin and the other FX men have been helping throughout my learning journey! :)

    Reply
  4. Hucklekiwi PipHuck

    Thanks for your opinions everyone! Well, TalonD, I consider myself a newbie because I am relatively new in this trading business. In fact, my trading experience doesn’t even total to one year… But I guess I am pretty lucky because Pipcrawler, Big Pippin and the other FX men have been helping throughout my learning journey! :)

    Reply
  5. thesenator20000

    Huck, Thanks for your advice and leadership. pls let me know the pairs you trade so that i can follow up. your advice has really helped.

    Reply
  6. thesenator20000

    Huck, Thanks for your advice and leadership. pls let me know the pairs you trade so that i can follow up. your advice has really helped.

    Reply

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