Trade Closed: 2009-02-27 09:45
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.
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.
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
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
Thanks for checking out my blog and stay tuned!