No Trade: 2011-05-19 00:50 ET
Before you move on, for those who are not familiar with my framework, signals, setups, or acronyms, please visit my discretionary day trading framework post.
As we can see in the chart above, 1.6300 was tested twice and even with slightly higher inflation and better employment data from the UK to support the pound, the bulls couldn’t break it. With the week coming to a close, it doesn’t look like I’ll get the trade I want so I have decided to closed my open short orders at 1.6350. No trade.
Today may be the last day to see some action at Cable as we have the monthly UK retail sales report coming up at 4:30 am ET. I’ll keep an eye on price action ahead of the report and if I see a good trade setup form, I’ll post it up and let y’all know through my Twitter and Facebook pages. Stay tuned!
Trade Idea: 2011-05-17 04:01 ET
Today on the forex calendar, we have UK CPI to potentially spark some action in Cable. Expectations are for a tick higher in both the monthly and yearly number, and if we get higher reads, then we could see the market rally higher and test an area of potential resistance and seller interest.
On the chart above, we can see the top of the weekly range (WATR) line up with the minor psychological level of 1.6350 and 50% – 61% Fibonacci retracement area. Quite a few reasons to watch the area for resistance, and if the risk aversion theme playing in the markets over the past few weeks comes back into play, it could happen there.
So, I’ll look to short in that area for a mostly technical based trade. My stop will be half the weekly average true range of about 300 pips, and my will be the bottom WATR area for a 2:1 potential return-on-risk. Here’s what I’m going to do:
I may scale into this trade, but I hesitate to do so with major events like the FOMC meeting minutes and BOE minutes right around the corner. What ever I may decided to do, be sure to stay tuned for my updates and adjustments by following me on Twitter and Facebook! Good luck everyone!