Pick of the Day: USD/CHF – Trade Update

Trade Update: 2007-02-21 16:15

Looks like there wasn’t any juice in the markets to push the dollar up in the afternoon trading session, especially after the FOMC Meeting Minutes show that the Fed views inflation as a concern, but moderating. So, as per trade rules, we will close our open orders (current market price at 1.2378) and take a small loss off of the long position.

Long trade: -12 pips
Short trade: -30 pips
Total: -42 pips

Trade Update: 2007-02-21 09:15

Our short trade entry triggered last night on high volatility and was whipsawed to a stopout for -30 pips. We we triggered on our long order and right now USD/CHF is hanging around the 1.24 price level. US CPI came out pretty much inline, which is why we’re seeing a pop in the dollar as market expectations were for a weaker CPI number.

Our long position has found resistance at 1.2410, so we will adjust our profit target to 1.2410 and hopefully we can offset some of the loss from our short trade. Stay tuned…

Trade Idea: 2007-02-21 01:15

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This morning, we’re seeing many different markets trade in a range ahead of US data, including USD/CHF. Right now the pair is trading in a tight 20 pip range – a good sign that we’ll see a breakout later as traders wait on the sidelines for data to come out.

US CPI is not expected to give support to the dollar, especially since we saw the recent PPI numbers come out weaker than expected. Of course, we never know what the numbers are going to be until they’re released, so we’ll be ready the market to go in either direction just in case. Here’s a couple of trade ideas:

Short half a normal position USD/CHF at 1.2340, stop at 1.2370, pt at 1.2310

or

Long half a normal position USD/CHF at 1.2390, stop at 1.2360, pt at 1.2420

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

Good luck and good trading!