Pick of the Day: GBP/USD – Trade Closed

Trade Closed: 2007-09-06 13:35

After making a low of about 2.0140 in the morning US trading session, Cable rallied up 120 points – hitting our stop at breakeven along the way.

Our position was closed out after this morning’s volatility which has put Cable back in the previous resistance area around 2.0230. I would short this bad boy once again, but with NFP coming up tomorrow, I think I will hold off until after the report to take on a new position.

1st Half: +50 pips
2nd Half: +00 pips
Total: +50 pips

Don’t forget…we still have a short position open in USD/JPY we are currently watching:

Short USD/JPY

Trade Update: 2007-09-06 08:35

Cable rallied highed enough during the European trading session to trigger our short entry at 2.0225 and then fell enough to hit our first profit target.

UK data came in weaker than expected and the Bank of England left interest rates at 5.75% as expected.

We closed half of our position at 2.0175 to lock in 50 pips. The stop on the remaining position should be moved to break even to create a risk free trade. We will hold onto this position and see what happens after ISM Non-Manufacturing data today at 10:00 am EDT.

Also, I will be hanging around our chatroom today from 9:00 am EDT to 11:00 am EDT. So, stop on by and say hi!

Trade Idea: 2007-09-05 22:12

PoD Chart

As we let our short position in USD/JPY marinate, let’s look at a potential short opportunity in GBP/USD…

As we look at the chart we can see the pair trading right around the down trending 240 MA’s and finding resistance around 2.02. Stochastics are indicating the pair is overbought.

We do have major news events with UK Industrial and Manufacturing data, UK Interest rate decision, and a mixture of US jobs and ISM data.

With so many different events, we could see whipsaw and range action, but a huge surprise in any of these reports can lead to a breakout in Cable.

I’m looking to short Cable to go along with the longer term down trend and I think without major surprises in UK data and if the MPC holds rates as expected, we may see Cable drop. Alright, enough chit chat… on to the trade:

Short GBP/USD at 2.0225, stop at 2.0275, pt1 at 2.0175, pt2 at 2.0125

Remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.

Good luck and good trading!

  • colby620

    That worked pretty good. Thanks for the advise.

  • Pipcrawler

    You’re welcome Colby :)

  • colby620

    That worked pretty good. Thanks for the advise.

  • Pipcrawler

    You’re welcome Colby :)