Update – 9:30 am EST
US CPI data has come and gone and we saw the dollar drop on flat CPI numbers. Unfortunately, it’s a little too late to jump in long at 1.2125 as i posted on my trade update. For those of you who did decide to buy at 1.2125, please set your target for 1.2180 which is coming up pretty quick at the current market price or at your discretion- this should make a great close out trade for the end of the week. Other than that, no more trade ideas for today. Have a great weekend!
Update – 7:05 am EST
The dollar quickly rose arond 4:00 am EST putting the market about 80+ pips away from our entry order. I will remove my order and wait until after this morning’s US data releases for a new trade idea. Right now I am looking to sell USD/CHF if it reaches 1.2242 or buy if the market drops to about 1.2125 to 1.2150. Again, it all depends on how the market reacts to todays news. Stay tuned!
12/14/2006: 11:50 pm EST
Dollar bulls have been on a run against the Swissy on good US data recently, but how much further will it move? I see the pair still having enough strength to carry itself another 100 pips, even after the 200+ pip move from 1.1900. US CPI data and the TIC report may give us the extra push to get there, or it may hold it back.
Even with energy prices dropping the last two months, import prices reported a surprise number of 0.2%. Traders took this as a good sign US CPI may come out strong for the month of November. The forecast on the TIC report is pretty much inline with the previous number at 65.0 B. This number may be lower as interest rates from other countries close in on the US and the value of the dollar has dropped in the past two months.
On the chart, you can see that I have drawn a resistance area for us to go long in case the market takes tomorrow’s reports as USD positive. The market is currently consolidating before tomorrow’s reports, in which we should see a breakout. If there pair breaks to the downside, I see it as a good opportunity to go long the USD at a great price.
Long 2 lots USD/CHF at 1.2100, stop at 1.2070, pt1 at 1.2160, pt2 at 1.2190
Based on market price and movement during the Euro trading session, I may adjust this trade right before US data is relased tomorrow at 8:30 am EST.
Please remember to never risk more than 1% to 2% of your account on any one trade – even on demo accounts! Adjust your position sizes to this rule accordingly. Good luck and good trading!