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Trade Closed: 2008-01-23 13:12

Our trade was closed today at our adjust profit targets as Cable saw selling pressure that brought it as low as 1.9450. We exited our trade for a profit as we caught the move from 1.9595 on down.

1st Half: +27 pips
2nd Half: +95 pips
Total: +122 pips/ +1% gain

Congrats to everyone who caught Cable short. Stay tuned for a new trade idea tonight!

Trade Adjustment: 2008-01-23 04:52

Our Cable short was triggered this morning after the European session open, but with UK GDP beating estimates coming out at 0.6% vs. the consensus of 0.5%. I am going to close a portion of our trade and adjust our exits as this may bring in more buyers on today’s positive UK data.

Close half position at market (1.9568), adjust stop to 1.9615, adjust pt to 1.9500

There is resistance at 1.9600, so it looks like there are sellers out there but we’ll have to wait and see if it holds. Stay tuned for further updates and good luck!

Trade Idea: 2008-01-22 22:50

PoD Chart

Wow, what a day in the markets with equities selling off in Asia and Europe and two central banks cutting rates. The big news was the FOMC surprising us all with an inter meeting rate cut of 75 basis points to bring the federal funds rate to 3.50%. Was it enough to help the markets and stem more risk aversion?

I’m going to say big ol’ “NO” as traders continue to speculate that the markets still need a 50 basis point cut at the Fed’s next scheduled meeting. This is telling me that risk aversion is still in play and that higher risk assets will continue to sell off in the short term.

Tonight, we have the UK GDP report, and we may see more selling of British Pounds against the Greenback if UK growth slows as forecasts suggest. A weaker read on GDP will also boost speculation of a interest rate cut by the MPC.

On the chart, we can see the pair has retraced on today’s surprise Fed rate cut, but it appears Cable has ran into resistance around the 61% Fibonacci retracement level drawn on the chart. Also, stochastics are in overbought levels, so we see a reversal coming soon.

Short GBP/USD at 1.9595, stop at 1.9655, pt1 at 1.9505, pt2 at 1.9370

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

Stay tuned for updates. Good luck and good trading!

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