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

Close Open Orders: 2008-03-11 14:05

We saw a broad US Dollar sell off during the morning European trading session, but it was quickly turned around at the start of the US trading session with news of the Fed’s plan to save the credit markets.

The US Dollar rallied across the board on this news and we saw Cable fall from it intra day high around 2.0200 to 2.0000. Momentum is to the downside for now, so I will close my open orders to go long at 1.9970 to avoid any further selling off of the pair.

Is this the news to turn around the markets and bring a risk appetite to the risk averse? Well, we will have to wait and see how the market interprets this event. Stay tuned!

Trade Idea: 2008-03-11 01:05

PoD Chart

We have a potential Fibonacci play on Cable today as the pair falls back down after testing 2.0200.

Stochastics are coming close to oversold territory, so we may see support around the psychological level 2.0000 as this quick downturn may be over done for the moment.
I feel we may see buyers come back in as the overall USD sentiment is still weak for the time being ahead of the FOMC meeting next week. My major concern is price action may be choppy as market players are now risk averse in this environment.

Long GBP/USD at 1.9975, stop at 1.9925, pt1 at 2.0025, pt2 at 2.0200

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

We do have event risk later today with the US Trade Balance data. Please be cautious and reduce risk ahead of this event. Stay tuned for updates. Good luck and good trading!