Pick of the Day: GBP/USD – Trade Closed

Trade Closed: 2007-04-13 20:15

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Here’s just a quick review on this trade. Our bullish outlook was correct at the time and our order to enter short was triggered during the early morning asian trading session. Cable picked up steam through out the morning Euro session and our position was closed out as it hit 1.9860, our designated profit target level.

Total: +35 pips

Trade Idea: 2007-04-11 23:58

Good evening! At 4:30 am EST, the UK Trade Balance report will be released. Economists are expecting a slight increase in the deficit from -6.4B from the previous month’s number of -6.2B. If off consensus, this number should cause a stir in Cable, but after the initial volatility, I think the pair will return to its uptrend.

The Fed stated that a boost in interest rates MAY be needed in today’s FOMC Minutes release. While this helped the Greenback initially, I don’t think traders were convinced and returned to Pound buying against the Dollar. The market’s outlook on the BoE raising rates and positive economic data is still a whole lot stronger than the possibility of the Fed raising rates, especially with the US economy appearing weaker everyday.

So, I will remain bullish on the Cable, and we’ll see if the UK Trade Balance brings us to a better price to buy Cable, or show us a breakout to the upside. Here’s today’s trade idea:

Long half position GBP/USD at 1.9710, stop at 1.9680, pt at 1.9760

Long half position GBP/USD at 1.9825, stop at 1.9785, pt at 1.9860

Please remember to never risk more that 1% of your account on any single trade, so please adjust your position sizes accordingly.

Good luck and good trading!