Pick of the Day: USD/CHF - Trade Closed
Trade Closed: 2007-11-13 12:10
It looks like we were in and out of a quick trade last night as momentum to the downside resumed and hit our first profit target.
Our short at 1.1275 was triggered and we quickly hit our first profit target during the morning European tradings session. Half of our position was closed and the stop on the remain portion was moved to break even. The pair quickly found support around 1.1240 and rallied back to our entry, closing out our remaining position.
1st Half: +25 pips
2nd Half: +00 pips
Total: +25 pips
Close all open orders.
It looks like this may be just a short term correction, but we'll have to see how the markets play out this week as have inflation data throughout the week. Look for very short moves and range plays in the mean time.
Trade Idea: 2007-11-12 23:48
It looks like global risk aversion has taken over the currency markets once again and the market in USD/CHF is finding itself at levels it hasn't seen since the end of 2004...where to from here?
On the chart above, we are looking at the USD/CHF on the daily time frame and I marked the support area where USD/CHF found a bottom and rallied back in 2004. It looks like bulls and bears are fighting there at the moment, but we may see a correctional rally from this point. We can see a bullish candle at the support area and stochastics showing the pair may be oversold at this point.
So, I am looking for a reversal, but we have to remember that the momentum is to the downside and it may continue to do so as more risk aversion and carry trade unwinds look to continue as global equities take a hit.
As far as upcoming events, it's inflation week with PPI and CPI coming out on Wednesday and Thursday. Higher readings may put a damper on interest rate cut expectations. This would not help equities and global risk aversion may continue.
So, the best course of action for this pair is to wait for it to make its move and jump in, and hopefully we can capture some momentum.
Long USD/CHF at 1.1325, stop at 1.1250, pt1 at 1.1375, pt2 at 1.1625
or
Short USD/CHF at 1.1275, stop at 1.1350, pt1 at 1.1250, pt2 1.1050
Please remember to never risk more than 1% of your account on any single trade. Adjust position sizes accordingly.
Stay tuned for updates and stop adjustments as our trade goes our way. Good luck and good trading!
