Close Open Orders: 2008-06-05 09:15

I have closed my open orders today as the Euro rallied higher on Trichet's comments that a rate hike may be in the cards for the next meeting to stabilize prices. This has boosted the Euro across the board, and will probably continue to do so until their next rate decision.

Close open orders. No trade

Trade Idea: 2008-06-04 00:17

What a day for the Greenback as Fed Chairman Bernanke finally comments on US Dollar weakness and that the interest rate cuts may be over. Does this signal a change in US Dollar sentiment?

It's too early to tell, but it seems that momentum is on the US Dollar's side, so we will go with that trend for now.

On the chart, I have the hourly time frame pulled up on the EUR/USD. Right now, the pair is hanging out after that very strong move from around 1.5625 to a low of just above 1.5400. Because I'm taking a short stance on the currency pair, I'm looking for a resistance area. After using the Fibonacci tool, I like the 38% to 50% Fibonacci retracement area as resistance as it also lines up with 1.5500, a psychologically significant area.

On the economic calendar for today, we do have event risk starting with ECB President Trichet speaking at the OECD Forum in Paris. Any commentary other than the usual hawkish stance may possibly knock the pair even lower. We also have Services PMI and Retail Sales in the lineup for Eurozone this morning. For the US, we are action packed with potential market moving events including ADP Nonfarm Employment data and ISM Non-Manufacturing data.

So, I'm looking for a retracement on the down move to get in short at a better price, and with the different events in today's lineup, I think I'll stay conservative on entries and exits.

Short EUR/USD at 1.5520, stop at 1.5580, pt1 at 1.5460, pt2 at 1.5410

Remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.

Stay tuned, good luck and good trading!