Trade Closed: 2007-04-20 07:53
Okay, so I may be the one who was sleep deprived last night when I posted the "Pick" last night. There was an error in last night's trade idea to go long at 2.0050. The pt was below the entry point! So, that trade is invalid. The short trade was valid and we were triggered half our normal position size to go short at 2.00 after the UK Retail Sales report came out slightly lower than expected at 0.3% versus the forecast of 0.5%.
The pair shot down past our entry point by only 10 pips or so before reversing. This is telling me that traders aren't ready to give up their long positions in Cable ahead of the weekend and that 2.00 will hold for now.
So, invalid trade (except for me since I put my orders in before I post...doh!) and a stop out as we saw more buyers at 2.00.
Long trade: invalid
Short trade: -45 pips
Trade Idea: 2007-04-20 00:03
For tonight's "Pick," we will once again look to Cable for an opportunity to make a profit. Today we saw a carry trade sell off as high yielding assets (like the British Pound) sell off and lower yielding assets were bought back. How long will this last? I'm not sure, but I know the market has a view strong view on the interest outlook in the UK, which makes sense to be long Sterling.
This pull back in Cable could be a great buying opportunity, but we do have event risk up ahead. The market is reflecting a possible breakout as GBP/USD is currently ranging about 20+ pips. With UK Retail Sales report out later, we may see more good news for the UK economy, which is obviously good for GBP. So, if the pair breaks the resistance level marked by the pivot point on the chart at 2.0036, then we should see a further move up. This move may be limited as the pair has made a monster run up, so we will take a small profit. Here's our long trade idea:
Long half position 2.0050, stop at 2.0010, pt at 2.0030
If we see a worse number than expected, this may be the excuse traders need to take some profit off of the table from their long positions. Here's our short trade idea:
Short half position 2.0000, stop at 2.0045, pt 1.9960
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!
- Pick of the Day: GBP/USD - Trade Closed 02:00 18 April 2007
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- Pick of the Day: EUR/CHF - Trade Closed 14:30 12 February 2007
- Pick of the Day: GBP/USD - Trade Closed 11:50 07 June 2007
- Pick of the Day: GBP/USD - Close Open Orders 10:43 24 April 2007
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