Trade Closed: 01/04/07 – 07:25 am EST
It looks like dollar bullishness just continued at full steam as the greenback continued its rally and stopped out our trade. GBP/USD dropped almost all the way to 1.9400 before we finally saw a retracement of 50 pips. Also, we got no help as GBP PMI came out slightly better at 60.6. So, I was a little bit off in my timing in that I was looking for a retracement then dollar rally, but instead we got further dollar rally, then retracement…doh!
Total: -50 pips
We have the US trading session coming up and few reports to be released, most notably ISM non-manufacturinig data. Depending on the numbers, we may see further volatility today, but it may be short lived as we have Non-farm Payrolls right around the corner. Stay tuned!!
What a crazy day for cable as it took a beating of almost 200 points against the dollar on stronger than expected ISM Manufacturing data today. With a move like that I like to look for a retracement on profit taking. Our cause may be helped if the GBP Purchasing Managers Index and GBP Consumer Confidence come out better than expected.
Of course, if this scenario plays out, it may be short lived with more US data coming out later at the start of the US trading session. Most notably, the ISM non-manufacturing data may help give the Greenback another positive day. So, for the Euro session, we will go long Cable against the dollar and I will possibly have a long dollar trade later today for the US trading session.
Remember to never risk more that 1% of your account on any single trade!!!
Good luck, good trading, and stay tuned for updates!!
Looks like our Euro session trade ended up being our only trade of the day as the FOMC Meeting Minutes provided no incentive for traders to jump back in after the report. With the US trading session filled with potentially volatile reports, we closed half of our long EUR/JPY position for +29 pips, and moved the stop to breakeven right before 8:00 am EST. Soon after our trade was stopped out, and the Euro proceeded to drop against the Yen. I hope everyone caught some pips on that one!