Pick of the Day: EUR/USD -Trade Closed
Trade Update: 2007-08-07 18:30
Our entry order to go long at 1.3745 was triggered a couple hours ahead of the Fed Interest Rate statement. After our entry, the market ranged in between 1.3740 to 1.3750 until the rate decision, which the Fed leaves rates at 5.25% as expected. The kicker was the Fed statement afterwards. While they did note increasing downside risks to growth and tightening credit conditions, they still believe that inflation concerns should come before growth concerns.
After the big event, we saw the Greenback rally just a bit before selling off. Our position easily hit our first profit target as EUR/USD rallied to 1.3770. We closed half of the trade and move the stop to breakeven. Soon after, the Dollar rallied once again and stopped out the second half of our trade at breakeven. So we get 20 pips for the day...not bad!
1st half: +20 pips
2nd half: +00 pips
Total: +20 pips
Trade Idea: 2007-08-07 00:05
Good Evening! EUR/USD has seen tons of volatility lately, and with tomorrow's US interest rate decision, we may be able to jump into the longer term trend at a better price!
On the chart, we can see that the 240 MA's are trending slightly higher, and that stochastics are currently in the overbought territory. With the pair appearantly overbought, we will look for a retracement to the 61% Fibonacci retracement level drawn on the chart before jumping in long.
But before we trade, let us take note of the fundamental risk with the Federal Reserve Interest Rate decision tomorrow at 2:15 pm EDT. The market is expecting no change, and the rhetoric of the statement will determine the future direction of not only the Greenback, but also bond and equity markets. We will be cautious around the statement release, and be ready to adjust our position based on the outcome.
So, let's get to the trade:
Long EUR/USD at 1.3745, stop at 1.3710, pt1 at 1.3765, pt2 at 1.3800
Please remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.
Good luck and good trading!
