Closed Open Order: 2010-03-03 22:10
The pair shot down right after I posted my trade idea and my entry point didn’t get a chance to be triggered. The pair even touched the 0.6900 handle, but retraced midway through the US session on increased risk appetite… It appears that optimism is back, as can be seen by the rises in both the EUR and GBP the last two days. This increased risk appetite presents a risk to long dollar trades, as it seems that risk sentiment is still the name of the game in the currency markets. I’m going to close my open orders ahead of some key reports coming up, namely the NFP report coming out tomorrow.
Looks like I’ve caught some bad breaks my last two trades. Nevertheless, I’m going to stay upbeat and I’ll be looking forward to my next trade idea. Till next time!
Trade Idea: 2010-03-02 22:20
After checking out Big Pippin’s blog, I quickly turned to my charts and yes… There it is, a sweet symmetrical triangle formation on the Kiwi! Waiting before it breaks out may take awhile so I decided to enter a short entry at 0.7000.
This level has already acted as a significant support for the pair in the previous months. Notice also that the 0.7000 handle corresponds to the triangle’s resistance. Will resistance at this level keep the pair from rallying further? I sure hope so.
Looking ahead, we’ve got a lot of high impact data reports coming out from the US over the rest of the week. The data that I’m keeping my eye out for is unemployment figures in the form of the ADP non farm change report, unemployment claims and finally, the non-farm payrolls on Friday.
Now, unemployment claims have posted some disappointing figures the past few weeks, as claims have been rising. Could this be a sign that the labor market is still unstable? If so, this could lead to another run of risk aversion, which would lead to some dollar buying.
In any case, I’m going to wait for results of the ADP report. If it comes out better than expected and posts actual job gains last month, we may see a similar figure on the non-farm payrolls. I may have to adjust any positions I have to avoid the possible event risk on Friday.
Here’s my plan:
Short NZDUSD at 0.7000, pt1 at 0.6940, pt2 at 0.6850, stop loss at 0.7050. I will risk 1% of my account on this trade.