Pick of the Day: GBP/USD – Trade Closed

Trade Closed: 2009-02-27 09:45

Good morning! The US Dollar resumed its run against the British Pound during the Asia and European trading sessions and Cable hit my second profit target. My position was closed at full profit.

1st Half: +200 pips
2nd Half: +350 pips
Total: +1.375% gain

So, it looks like these choppy markets are back into risk aversion mode as the Greenback rallied across the board. US Dollar strength may continue in the short term as traders pull out of the Japanese Yen and Swiss Franc for safety. This sentiment may continue into next week and I’ll be watching to see if Cable breaks or holds the minor support at 1.4150. Stay tuned and have a great weekend!

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Trade Adjustment: 2009-02-25 10:11
Trade Update: 2009-02-26 19:48

Greetings! Since my adjustment, Cable made lows around 1.4170 and nearly hitting my second profit target at 1.4150. I trailed my stop by 100 pips during this move, and my adjusted stop at 1.4400 was nearly hit during the retracement higher. Luckily, it wasn’t and Cable is back on track to test lows once again.

We saw risk aversion today after US data came in weak with both Durable Goods and New Home Sales disappointing. This lead back to a run to the US Dollar as the ‘safe haven.’

We’ve got one more day this week to see if Cable makes any moves lower. I will probably close up my trade before the weekend to avoid any unforeseen event risk. Stay tuned!

Good morning! UK data came out pretty much inline with expectations, but still pretty bad as fourth quarter GDP came in at -1.50%, exports fell to -5.50% and government spending increased in the fourth quarter as well. We saw Cable drop at the open of the European trading session and the fall hasn’t slowed down yet! My first profit target was hit and now it’s time for some adjustments.

Half position closed at 1.4300 to lock in profits. Adjusting stop on remaining position to breakeven (1.4500) to create a risk free trade.

I will continue hold this position and trail my stops from here by 100 pips. If still in the trade by the end of the week, I may close it out before the weekend. Let’s see what happens as we still have plenty of data to get through including housing data from both the US and the UK, and jobs, durable goods, and sentiment data from the US.

Keep on your toes in the midst of the choppiness and stay tuned for updates!

Trade Update: 2009-02-24 20:30

Greetings! My short position was triggered as ‘Cable’ rallied higher yesterday, and after hitting resistance around the 61.8% Fibonacci level we saw sellers jump in and push the pair back below 1.44. Unfortunately, GBP/USD is back above 1.45, so no direction yet for the pair.

There may be a boost in the British Pound, one way or another, with UK GDP coming out in the upcoming European trading session. Expectations for both the quarterly and yearly number are forecasted to be worse than previous numbers. If so, focus may shift back to weakness in the UK, and possibly back to selling the British Pound. In the upcoming US session, existing Home Sales may be the market mover. Expectations are for weak numbers for US housing data. Will it equate to USD weakness, or risk aversion and Cable selling? We’ll have to wait an see.

For now, I will continue to hold my trade. Stay tuned for updates!

Trade Idea: 2009-02-23 14:48

PoD Chart

What’s up Forex Fanatics! Got another simple Fibonacci setup on Cable to play with current sentiment that we will see further gains in the Greenback as a “safe haven” play. Let’s take a look!

On the four hour chart, we can see that the pair found resistance at the 61% Fibonacci retracement area and turned lower. Stochastics are in overbought territory and turning lower. Is the risk rally down and will we see a reverse back to the downside?

Sentiment is still for a stronger US Dollar as a “safe haven” and the UK is still playing catch up to the US in terms of actions taken to begin quantitative easing. Should there be a round of ‘risk aversion’ trading this week, we may see the British Pound hit lows around 1.4100 this week.

Lots of event risk this week from both the US and the UK. Most notably from the US is Fed chairman Bernanke’s testimony to Senate Banking committee, housing data, and GDP. From the UK, the events to watch are the GDP, housing numbers, and commentary from Bank of England Governor King.

So, I am short bias for now and I would like to short at 1.4500 if the market get backs up there. I’m using a large stop, area above the previous high, so I’m going to have to reduce my position size. My target is the previous support around 1.4150 and beyond

Short GBP/USD at 1.4500, stop at 1.4700, pt1 at 1.4300, pt2 at 1.4150

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

Thanks for checking out my blog and stay tuned!

  • tjhimself

    i actually entered this one at the same time on the chart. so i guess im in it with u

  • sentimentaladam

    Looks good. I’ve got a limit order in for a short on 1.4510 we’ll see if it hits it. Good luck

  • julian

    its not triggered yet as i see it ??

  • xaser

    very close but no cigar (looks like it will get triggered shortly). Will it hold? that is a different question.

  • engin

    wait 1.4665 again then look what will happen

  • julian

    engin, you do like to wait for a better price ! did you end up getting in on the eur/jpy trade before it dropped back down again ?? if so it was a good call.

  • tjhimself

    i actually entered this one at the same time on the chart. so i guess im in it with u

  • sentimentaladam

    Looks good. I’ve got a limit order in for a short on 1.4510 we’ll see if it hits it. Good luck

  • julian

    its not triggered yet as i see it ??

  • xaser

    very close but no cigar (looks like it will get triggered shortly). Will it hold? that is a different question.

  • engin

    wait 1.4665 again then look what will happen

  • julian

    engin, you do like to wait for a better price ! did you end up getting in on the eur/jpy trade before it dropped back down again ?? if so it was a good call.

  • engin

    no i am waiting 122.50 and 122.75 still and in gbp/usd i am waiting 1.4665 again and i will get short position.
    dont go to market julian let it comes to you price is not runing anywhere

  • engin

    no i am waiting 122.50 and 122.75 still and in gbp/usd i am waiting 1.4665 again and i will get short position.
    dont go to market julian let it comes to you price is not runing anywhere

  • julian

    well you were right with eur/jpy,, i got stopped out at 122.50. Im in g/u from 1.4541. Hopefully 1.4665 is as high as it goes before the price drops. Thanks

  • PipEater

    Nice trade Big Green!

  • engin

    1.4320 maybe but 1.41 no i dont think so

  • bilal_shirazi

    some gains this morning.. took some profit.. commentary would be appreciated, especially the current state of technical indicators

  • engin

    i am waiting 1.46 then i will be with you

  • julian

    i`ve taken some profits off the table,, lots of different views out there

  • julian

    well you were right with eur/jpy,, i got stopped out at 122.50. Im in g/u from 1.4541. Hopefully 1.4665 is as high as it goes before the price drops. Thanks

  • PipEater

    Nice trade Big Green!

  • engin

    1.4320 maybe but 1.41 no i dont think so

  • bilal_shirazi

    some gains this morning.. took some profit.. commentary would be appreciated, especially the current state of technical indicators

  • engin

    i am waiting 1.46 then i will be with you

  • julian

    i`ve taken some profits off the table,, lots of different views out there

  • Gusmeran

    1.4585: I’m in with you guys!

    stop @ 1.4715
    tp1 @ 1.4435
    tp2 @ 1.4345

  • engin

    not bad its going to 1.4150 its very strong but if it cannot hold we can hold positions for 1.4050 and next target 1.35

  • bilal_shirazi

    engin, care to expand on what indicator you saw at 1.46? you seemed to know exactly where it would turn

  • Gusmeran

    1.4585: I’m in with you guys!

    stop @ 1.4715
    tp1 @ 1.4435
    tp2 @ 1.4345

  • Gusmeran

    engin, I’m curious too :-)))

    anyway, hit my first TP!

  • engin

    in one hour chart there was a bearish gartley and it was showing 1.46 and 2 hour chart its just touched bollinger band and stochastic levels were overbought and parabolic sar was right there…are they enough to get in what do you say???

  • engin

    by the way i am waiting for short position in eur/jpy 124.70-125.05 and if it stop loss 126.10
    pt1:123.12 and if it cannot hold next two days(weekend)
    pt2:120
    pt3:112
    if it break 126.10 then wait for 130 to sell for same prices…

  • Pipcrawler

    Thanks for the comments everyone and I hope all is trading well! Looks like Cable broke down today on weak UK news and housing data from the US. More risk aversion and flight to the USD. Hey bilal, if your strategy tells you the pair is going long or short, you should roll with it. For me, I used stochastics and fibs and both aren’t indicating I should change my direction yet. julian, there are a ton of views out there going one way or another. That’s why its best to develop your own strategy, execute your plans, and manage your risk. Trying to keep up with all the views out there will just having ya running in circles. Trust me :) Stick to your own guns, practice and improve, and you’ll be ok! :)

  • engin

    if its breaks 1.4296 i will close my position and wait for 1.4789 and 1.4850 to get short again…

  • engin

    not bad its going to 1.4150 its very strong but if it cannot hold we can hold positions for 1.4050 and next target 1.35

  • julian

    engin, will you set up an order to get in that eur/jpy trade or do you just keep an eye on it constantly then get in when your happy with price ?

  • engin

    not yet julian i am watching but 124.70 and 125.05 looks like strong. i will try my chance.but before i said if it cannot break 123.12 before the week over then i get long position @123.12….. now just wait…

  • bilal_shirazi

    engin, care to expand on what indicator you saw at 1.46? you seemed to know exactly where it would turn

  • PipWolf

    Another great trade idea, Pipcrawler.

    So we’re abandoning PT2 (which is pretty close at the time of writing and looks like it will be hit) and letting this trade ride with a 100 pip trailing stop, right?

  • Gusmeran

    engin, I’m curious too :-)))

    anyway, hit my first TP!

  • engin

    in one hour chart there was a bearish gartley and it was showing 1.46 and 2 hour chart its just touched bollinger band and stochastic levels were overbought and parabolic sar was right there…are they enough to get in what do you say???

  • engin

    by the way i am waiting for short position in eur/jpy 124.70-125.05 and if it stop loss 126.10
    pt1:123.12 and if it cannot hold next two days(weekend)
    pt2:120
    pt3:112
    if it break 126.10 then wait for 130 to sell for same prices…

  • Pipcrawler

    Thanks for the comments everyone and I hope all is trading well! Looks like Cable broke down today on weak UK news and housing data from the US. More risk aversion and flight to the USD. Hey bilal, if your strategy tells you the pair is going long or short, you should roll with it. For me, I used stochastics and fibs and both aren’t indicating I should change my direction yet. julian, there are a ton of views out there going one way or another. That’s why its best to develop your own strategy, execute your plans, and manage your risk. Trying to keep up with all the views out there will just having ya running in circles. Trust me :) Stick to your own guns, practice and improve, and you’ll be ok! :)

  • engin

    if its breaks 1.4296 i will close my position and wait for 1.4789 and 1.4850 to get short again…

  • julian

    engin, will you set up an order to get in that eur/jpy trade or do you just keep an eye on it constantly then get in when your happy with price ?

  • engin

    not yet julian i am watching but 124.70 and 125.05 looks like strong. i will try my chance.but before i said if it cannot break 123.12 before the week over then i get long position @123.12….. now just wait…

  • PipWolf

    Another great trade idea, Pipcrawler.

    So we’re abandoning PT2 (which is pretty close at the time of writing and looks like it will be hit) and letting this trade ride with a 100 pip trailing stop, right?

  • Pipcrawler

    Thanks again everyone for the comments! Pipwolf – I update the trade above, and Cable didn’t hit my adjusted stop at 1.4400. With one more day until the weekend I will look to close the trade out to avoid any unseen even risk.

  • LoboTrader

    Pipcrawler: Another great entry, but in my 15 M time frame, this pair do 1.4159 at 8:30 (GMT) yesterday, why not take this, the profit is only 9 pips more than your target ?

  • Pipcrawler

    Thanks again everyone for the comments! Pipwolf – I update the trade above, and Cable didn’t hit my adjusted stop at 1.4400. With one more day until the weekend I will look to close the trade out to avoid any unseen even risk.

  • LoboTrader

    Pipcrawler: Another great entry, but in my 15 M time frame, this pair do 1.4159 at 8:30 (GMT) yesterday, why not take this, the profit is only 9 pips more than your target ?

  • Gusmeran

    Pipcrawler, you hit it! Nice trade…

    Time to reverse IMHO; what do you think guys?

  • Gusmeran

    Pipcrawler, you hit it! Nice trade…

    Time to reverse IMHO; what do you think guys?

  • bilal_shirazi

    I’m waiting at 1.46 for another fresh entry (short)

  • LoboTrader

    Pipcrawler: Congratulations Master.

  • engin

    if the first movement turns @1.4470 to 1.42250 then short @1.4550 or the first mowement will be @1.4550 then wait for 1.48-1.4850

  • bilal_shirazi

    I’m waiting at 1.46 for another fresh entry (short)

  • LoboTrader

    Pipcrawler: Congratulations Master.

  • engin

    if the first movement turns @1.4470 to 1.42250 then short @1.4550 or the first mowement will be @1.4550 then wait for 1.48-1.4850

  • agbagold

    hi
    God bless forv ur wonderful work in the forum.pls can u send pick of the day to my email:agbagold2007@yahoo.com.thanks

  • agbagold

    hi.
    thanks 4 de wonderful work in the forum.pls could usend pick of the day to my email address :agbagold2007@yahoo.com.thanks

  • agbagold

    hi
    God bless forv ur wonderful work in the forum.pls can u send pick of the day to my email:agbagold2007@yahoo.com.thanks

  • agbagold

    hi.
    thanks 4 de wonderful work in the forum.pls could usend pick of the day to my email address :agbagold2007@yahoo.com.thanks

  • chubspips

    PipCrawler, could you please send me a pm here on babypips… I have a couple of questions for you personally and would like some input and advice.

    Thanks,

    Chubs

  • chubspips

    PipCrawler, could you please send me a pm here on babypips… I have a couple of questions for you personally and would like some input and advice.

    Thanks,

    Chubs