Pick of the Day: USD/CHF – Close Open Trades

Trade Update: 2007-02-27 10:00

We saw a much weaker than expected Durable Goods number drop larger than expected to -7.8%, Consumer Confidence came out at 112.5 vs. consensus of 109.0, and Existing Home Sales came out at rose +3.0% to 6.46 million. So, Durable Goods weaker, and the more closely watched Consumer Confidence and Existing Home Sales data stronger.

Because of the positive Consumer Confidence and Existing Home sales I will close my short trade at market (1.2229). Close all open orders as well.

Total: -9 pips

Trade Idea: 2007-02-27 08:20

There was a broad selloff in the dollar during the Euro session which shows how strongly the market feels about the upcoming US reports. Because the Greenback has been selling off for a few days, I am playing the “buy the rumor, sell the news” scenario…unless the numbers come out way worse than expected. Of course, we will have a trade idea on just in case we see great numbers. If we do see better than expected numbers, then the dollar should see a nice rally.

Long half position USD/CHF at 1.2265, stop at 1.2245, pt at 1.2290

or

Short half position USD/CHF at 1.2220, stop at 1.2250, pt at 1.2200

Remember to never risk more than 1% of your account on any single trade, so please adjust your position sizes accordingly.

Good luck!

2007-02-27 01:30

On tap for today we have some market moving reports coming out of the US – Durable Goods, Existing Home Sales, and Consumer Confidence. With the entire market expecting disappointing numbers, we’ve seen the dollar steadily sell of against the major currencies. There are a few scenarios that can play out tomorrow:

Either:

a) The numbers come out terrible.
b) The numbers come out great.
c) The numbers come out mixed.

Most likely scenario is a “buy the rumor, sell the news” where the dollar rallies after the reports are released on profit taking, if we see a) or b). If we see c), then we’ll see a bit of whipsaw action, after which the dollar goes no where.

Since we’re not too sure what will happen, we will wait until the morning, assess market action in the Euro trading session, and see if we have any opportunities then. So, stay tuned!

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