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Trade Close: 2007-08-23 10:00

Well, it looks like a return to risk as higher yielding assets rallied against low yielding assets during the morning European trading session.

Cable rallied from the beginning of the European trading session, enough to trigger our short play at 2.0000. Unfortunately, it didn’t stop until 2.01 which means we were stopped out…dohhh!!!

Total: -50 pips

It looks like risk appetites are returning to the currency and equities markets, but how long will it last?? We will just have to wait and see. Stay tuned for the next pick!

Trade Idea: 2007-08-22 22:00

PoD Chart

Good evening! We have a potential, short-term technical play coming up in GBP/USD.

On the chart, we can see the 240 MA’s trending lower, showing price momentum is to the downside and that this retracement could be an opportunity to jump in at a great price. Stochastics are also showing the pair is overbought.

Fundamentally, Cable has risen as global risk appetites rise again, and on the possibility that we may see rates continue to rise in the UK. Also, there is speculation that the Fed may cut rates in the US, which would be very bad for the Greenback.

With that said, let’s remember that a rate hike in the UK and a rate cut in the US is all speculation and may or may not happen. The current environment is telling me that investors/traders are going to be risk averse for the time being and that we may eventually see a return to the Dollar as a safe haven.

So, we will short Cable if it reaches the 2.00 level to play a longer term view.

Short GBP/USD at 2.0000, stop at 2.0050, pt1 at 1.9950, pt2 at 1.9900

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

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