Close Open Orders: 2008-01-09 11:28
As I commented below, Cable sold off as soon as the European trading session opened. The rally to the top of the consolidation range didn’t materialize; instead the pair broke below previous lows around 1.9660 all the way down to its current trading area around 1.9550.
Close open orders to short GBP/USD at 1.9825
So, we were right in the direction, but just a bit too conservative on our entry.
We have UK and ECB interest rate statements tomorrow, so I’ll have a trade idea tonight for how Asia and Europe may play the currencies before the statement. Stay tuned!
Trade Idea: 2008-01-09 00:09
We have a light economic calendar for today’s trading session, and with the Bank of England’s interest rate decision coming up in a couple of days, today’s trading session looks like a good opportunity for a range play.
As we can see on the chart, Cable has been consolidating this week for the reasons mentioned above and will probably continue until Thursday’s rate decision. I like a short at the 38% Fibonacci area as we saw resistance and reversal a day earlier.
A short also plays into the sentiment that Cable’s rally has been a bit overdone and we are in a corrective phase at the moment. So, we will sell short and possibly convert this trade from a short term trade to a longer one if the downtrend resumes.
Short GBP/USD at 1.9825, stop at 1.9880, pt1 at 1.9760, pt2 at 1.7655
Remember never to risk more than 1% of your account on any single trade. Adjust position sizes accordingly.