Pick of the Day: GBP/USD - Trade Closed
Trade Closed: 2007-08-08 11:15
The Bank of England released their Inflation Report earlier this morning showing further inflation concerns and signaling that more rate increases may be necessary.
Cable hit the gates running, but not before a big 60 point drop before the open of the European trading session. This move was enough to trigger our orders to go short at 2.0170 and even bring us within 5 points of our first profit target, but Cable buying ensued and stopped us out...
Total: -50 pips
Trade Idea: 2007-08-07 23:10
Today, we're going to check out what's going on with Cable and see if the strong momentum down will continue.
The Pound has been taking a beating on recent reports of slowing retail sales growth as well as the second report of foot-and-mouth disease in cattle. This is a major concern as the last time the disease hit the UK, the Pound took a 1000 pip beating as the economy suffered.
Tag this along with the Fed's continued concern of inflation over growth, and we may see Cable fall further. Of course, we do have the Bank of England inflation report later today, and a strong inflation outlook may slow the downtrend or even reverse. We won't know until it comes out.
For now, we will remain with the short term trend and take a trade with a break below 2.02. Here it goes:
Short GBP/USD at 2.0170, stop at 2.0220, pt1 at 2.0150, pt2 at 2.0100
Remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.
Good luck and good trading!
