Just a quick stop adjustment on our open USD/CHF position that was left open from Tuesday. We have ISM services coming up in a few minutes, so we will adjust our stop from 1.2240 to 1.2220 to protect ourselves from event risk. Good luck!
Today we saw the dollar rally on a slightly higher number of 109.3 vs 108.5 in January. Unfortunately, the yearly rate came out down at 8.5%. Also, geopolitcal tensions eased a bit in Iran after reports that the U.K and Iran will negotiate for the detainees. This led to a drop in oil prices which is also a boost for the Greenback.
Our trade was actually triggered during the Euro session, and made its way down to 1.2170 before reversing up to it’s current level around 1.2225. I plan on keep this trade open as the pair looks overbought on the 4 hour, 1 hour and 30 minute charts. Also, the pair is now at a previous level of resistance and in a longer term downtrend, so we may see the downtrend resume at this level.
While we will probably see the situation between the U.K and Iran resolve peacefully, any kind of hiccup in negotiations should push the dollar lower.
I will probably close the trade of if still open tomorrow morning as we have event risk in the US with economic reports starting at 7:30 am EST. Stay tuned!
Trade Idea: 2007-04-03 00:30
Good evening… or should I say good morning to my friends already trading in Asia, and those getting up in Europe! 🙂 Welcome to another month of Forex trading, and for tonight it looks like there isn’t much in the pipeline as far as news events, so we will look for a rangebound play this evening. Let’s see what’s going on in the world tonight, shall we?
Doesn’t look good for the Greenback lately, with the pounding it took on Friday after the announced import duties on subsidized China goods, rising commodity prices, mortgage woes, and geopolitical issues happening in different parts of the world. So, I’m dollar short biased as I think we haven’t seen the end of the dollar’s troubles. But it may be time for the dollar to take a breather on some profit taking. Either case would play well with a short term rangebound outlook on USD/CHF. Price action has been limited to 1.21 and 1.2230 for the last few days as traders are unsure of where to go next. This should continue throughout tomorrow with the lack of any major news reports.
Short USD/CHF at 1.2190, stop at 1.2240, pt1 at 1.2160, pt2 at 1.2100
Long USD/CHF at 1.2105, stop at 1.2065, pt1 at 1.2135, pt2 at 1.2190
Remember to never risk more than 1% of your account on any single trade, so please adjust your position sizes accordingly.