Pick of the Day: GBP/USD

Pick of the Day

With the thought of any rate cut from the Fed anytime this year, the market has sent the Greenback rallying in a slow and steady pace. Will it continue? For now, this is the main theme of the dollar as Chicago Fed President Moskow hinted that the economy may continue to grow and inflation to slow throughout the rest of ’07.

As far as the Sterling goes, this pair has been in a correctional mode since it’s huge run up to US$2.00 per Sterling a month or so ago on speculation of future USD interest rate cuts. How much more of a correction do we have or are we seeing a reversal? I’m not sure, but I know we could possibly ride the trend for a few quick pips for the day!

So, here’s a short trade idea to catch any possible downside momentum left in the pair:

Short GBP/USD at 1.9690, stop at 1.9720, pt1 at 1.9670, pt2 at 1.9640

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

Good luck and good trading!