About Pick of the Day

Each day, I will try to find what I believe is the best looking short term trade setup for the upcoming trading day or week. If you're a forex newbie, it can be tricky in the beginning trying to figure out how to look at charts and draw lines. My goal is help you understand the psychology of price movements so you can learn to analyze your own charts and trade on your very own. I will post my ideas and/or reviews through out each session right here, on Twitter and on Facebook.

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July 2006

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Pick of the Day: GBP/USD

Posted 22:49 05 July 2006 | Comments

Tonight's pick is on GBP/USD. As you can see from the chart we saw extreme dollar weakness after the dovish comments from the Fed, but failure to break the 1.8500 level. So, now we see a move to the short side, but will it continue?? Where to from here?

Well, we have the Industrial and Manufacturing reports coming out of the UK at 4:30 am EST, and the Bank of England rate decision at 7:00 am EST. The market is expecting better numbers than previous for the Industrial and Manufacturing reports, but no change in the interest rate statement. So where does that leave us? We may see a quick move to the upside, but I will be looking for a short in this pair because without a rate hike in the UK I see the US dollar gaining ground on Cable. Here are a couple of short ideas:

Short GBP/USD at 1.8285, stop at 1.8325, pt1 at 1.8250, pt2 at 1.8200

Short GBP/USD at 1.8425, stop at 1.8460, pt1 at 1.8395, pt2 at 1.8355

Please be cautious during the morning US economic report releases at 8:30 am EST and 10:00 am EST.