Trade Closed: 2008-01-04 15:00
We closed out the day with a small profit on our initial trade. No other trade ideas at the moment as we are approaching the end of the week.
Half position: +44 pips/ +.55%
In review, my long order should have been at the round number 1.4700 as we were spot on in our analysis as EUR/USD found support and rallied to 1.4800. Regardless, it’s still not a bad start to the new year. Stay tuned for a new idea and have a great weekend!
Trade Adjustment: 2008-01-04 08:00
Our half position closed at a profit this morning as our market short reached our profit target at 1.4700. So, we took in +44 pips on this leg of the trade, but there wasn’t enough momentum down to trigger our long order at 1.4690.
For now we will close open orders to go long at 1.4690 and wait until after the US Jobs data is released before determining a market bias.
Consensus is calling for around 70k on the NFP report. Anything higher suggest a little bit of stability in the economy, and of course, anything worse or a negative number suggests recession.
As always, I stay away from putting in orders, market and limit, at the time of the Jobs data release to protect myself from slippage and whipsaws. No change in that strategy.
Stay tuned as I may have a new trade idea after the report.
Trade Idea: 2008-01-03 18:13
Welcome to 2008! It’s good to be back from vacation and to the markets! I thought we would start off the year with a short term play on EURUSD and a slightly different trade idea than usual.
The pair has been on a short term rally since the beginning of the new year, and I think we will see profit taking during the Asia and European sessions before tomorrow’s US Non-Farm Payrolls report. So, I would like to catch that short term move down if it happens.
If we do see the pair move back to 1.47, I think that would be a great opportunity to jump in the pair long. I feel traders the sentiment is still a weaker Greenback, especially with sentiment leaning towards a weaker US economy, and possibly a recession. Recent US data has shown this may be the case with ISM showing a contraction and Jobless Claims still on the rise, and now the markets feel a rate cut from the Fed is almost guaranteed.
So, I look to long the pair if we reach the support area drawn on the chart. With both legs of the trade being separate directions, I will risk a max .5% on each one.
Short EUR/USD at market (1.4744), stop at 1.4784, pt at 1.4700
Long EUR/USD at 1.4690, stop at 1.4640, pt at 1.4800
Remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.
So, a bit different than the usual trade idea, but this is how I feel the markets will play out in hours ahead of the NFP report. Stay tuned for updates and possibly quick adjustments. Good luck!