Close Open Orders: 2007-10-26 09:08
The Dollar continues to take a pounding as we see speculation of a possible US interest rate cut beyond October and a return to risk as higher yielding currencies continue to be in favor against the Greenback.
We will close all open orders
Trade Idea: 2007-10-25 13:14
Well, we saw US economic data come and go with a couple of surprises as Durable Goods disappoints while New Home Sales comes in at 770K. This is slightly higher than last month’s number which was revised lower from 795K to 735K.
EUR/USD rallied into the Durable Goods number to test previous highs, but sold off soon afterwards and the Dollar continued to rally after the housing data. Right now we’re seeing consolidation around the 1.43, which may continue through the rest of the day. Where to next?
Well, this pair is currently trading near the top of a 300 pip range that has been going on since the beginning of October. Stochastics are indicatiing near overbought levels for the pair, and we just saw a test and failure to penetrate previous highs. Without any major data releases for the rest of the week, we may see sellers take over and bring the pair into the middle of the range.
Fundamentally, I feel that a rate cut is priced into the market, so I think we may see the pair fall back down before the end of the week as traders take profits on the recent run and reduce risk ahead of next week’s major event.
We will sell below the candle low at 1.4275, with our stop above the all time highs and target 1.4150 – 1.4200.
Stay tuned for any quick trade adjustments. Good luck and good trading!