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Trade Closed: 2007-05-29 22:25

The remaining portion of our trade was stopped out at breakeven last evening as traders lightened up on risk and unwound some of their carry trade positions. China triples the share tax on securities transactions which brings a concern that traders may not be as open to risk if equities start to fall in China. We’ll just have to wait and see if this is a significant event for the global markets. For now, we bag +20 pips on this trade. Not bad!

1st half: +20 pips
2nd half: +00 pips
Total: +20 pips

Stop Adjustment: 2007-05-25 12:55

As we had hoped for, trader’s risk appetite for yield returned at the 240 WMA and we saw our long trade orders triggered at 1.6490. The pair has rallied as high as 1.6523 before retrace back down to its current level around 1.6515.

Half of our position was closed 1.6510 to lock in +20 pips profit, and our stop has been adjusted to breakeven at 1.6490. We will hold this trade into the long holiday weekend here in the US. Good luck and have a great weekend my friends!

Trade idea: 2007-05-24 19:37

crosseyed chart

Salutations! This evening we will take a look at a possible reversal in the EUR/CHF. In the last few trading sessions, it looks like market players’ demand for risk has slowed for a bit as we see equities actually close negative for a change and classic carry trade currencies, like the Swissy, rally for a bit. So, is this a temporary swing or will risk aversion continue?

I think it’s a temporary swing. Let’s face it – investors want a higher yield! So, I see the recent downtrend in EUR/CHF as a good opportunity to participate in some yield collection!

On the chart, we have the pair trading at the 240 WMA. To us, the 240 WMA on the 4hr chart represents the average price of a currency pair over the last month. So, I see the pair trading at fair value, and at an attractive buy level. Stochastics are at oversold levels (12.50) which add fue to the possible return to an uptrend.

Fundamentally, we do have a few events up for the pair with the Swiss Trade Balance and Leading Index set to be released in the upcoming Euro trading session. Watch out for those. For now, here’s a low risk trade idea to catch some interest

Long EUR/CHF at 1.6490, stop at 1.6440, pt1 at 1.6510, pt2 at 1.6550

Please remember to never risk more than 1% of your account on any trade. Adjust your position sizes accordingly!

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