Pick of the Day: USD/CHF – Trade Closed

Trade Closed: 2007-05-01 10:58

ISM and Pending Home Sales numbers both came out at a surprise, with ISM Man. Index out at 54.7 vs 51.0, ISM Man. Prices at 73.0 vs. 65.9, and Pending Home Sales down -4.9%. So, good ISM numbers and bad pending home sales. I wanted to wait to see which one would prevail and it looks like ISM won. This pushed the pair up and we were just stopped out at a loss.

While we did follow our plan, this was still a frustrating trade as we were in the money +48 pips, 2 pips away from hitting our profit target.

One of the difficulties in the format of “Pick of the Day” is getting information to all of our visitors in a timely manner. I wanted to close our position, with a profit and to avoid event risk, but
the process to update this page is not an easy or speedy one. So, this is what I propose: instead of constant blog updates, which may also clog your inbox for those of you signed up on the email alerts, I will post updates and trade adjustments in the comment section. Only the original trade idea and trade review will be posted on the page. How does that sound? Please leave a comment if that does or doesn’t work. Thanks.

1st half: -40 pips
2nd half: -20 pips
Total: -60 pips

Trade Update: 2007-05-01 08:25

We entered short USD/CHF on one of our orders last night as the pair rose to 1.2100 right after the Euro session open. It’s currently 15 pips in the money, so we will just hold on to our position for now. ISM manufacturing data will be out at 10:00 am EDT. We may see more weak data after yesterday’s weak Chicago PMI number. This should benefit our short position, but we’ll just have to wait and see. Stay tuned!

Trade Idea: 2007-05-01 00:35

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Good Evening! May is here, which means it’s almost SUMMER TIME!! Sorry, couldn’t hold the excitement in! Well, tonight we will take a look at USD/CHF. Today, we had the Fed’s preferred inflation indicator, PCE, come out with the core number slightly below expected at 0.0%. Personal spending was down as well as the Chicago PMI. So, more bad news for the Greenback, and the market acted accordingly with a broad based dollar sell off after the news releases.

With an end to dollar woes no where to be seen, we remain bearish on the dollar ahead of important data tomorrow, ISM Manufacturing data at 10:00 EDT. Does the Chicago PMI signal weaker ISM data? We will see, but whatever it may be, it may be enough to cause enough volatility to push the Greenback to a more reasonable price to short. Here’s our trade idea:

Short half position USD/CHF at 1.2100, stop at 1.2140, pt at 1.2050

and

Short half postion USD/CHF at 1.2120, stop at 1.2140, pt at 1.2050

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

Just a reminder: We have an abundance of holidays around the world this week, so trading volume may be light, which lends to big spikes. Please be cautious and stick to your trading plans. Good luck!