Pick of the Day: GBP/USD – Close Open Orders

Close Open Orders: 2007-04-24 10:43

US Existing Home sale came out at 6.12M and Consumer Confidence came out at 104.0, both lower than forecasted by the market. This supports our long bias on GBP/USD, but unfortunately, the pullback to 1.9900 never occured to enter long in the market. With the current market over 100 points away from our entry, we will close all open orders, as any pull back from this point may signal a reversal.

Trade Idea: 2007-04-24 04:43

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Cable has made a nice run up hasn’t it? It looks like traders are taking profits now as GBP/USD has dipped back below 2.00, but where is it going next. Some people are thinking there’s more downside as the run up in Cable was way too fast, while others are pointing out that inflation is still high in the UK. Tough call, eh?

I think it has been a nice run up in the pair, so profit taking and retracement is expected. The question you gotta ask yourself next is, “How are the fundamentals?” Well, market sentiment is we will see rates rise in the UK and economists think the Fed will cut rates sometime this year. By this scenario, I’m still long bias and will jump in long in this pair, but ya’ll know how I don’t want to get the best deal right??

So, I will jump in long half my normal position size in between the 38% and 50% Fib levels at 1.99 to test out my idea that the Sterling has a ways to go against the dollar.

Long half position GBP/USD at 1.9900, stop at 1.9855, pt 1.9990

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

If we get stopped out on the pair, it may just mean we were a little early on the turning point, and I will then watch the 61% Fib level. Also, we do have event risk with US Existing Home Sales and Consumer Confidence tomorrow. Please be cautious during that time frame. Good luck and stay tuned for updates!