Trade Update: 2011-6-16 00:14
Surprise, surprise! The U.K. Claimant Count Change report came out worse than expected yesterday, which resulted in a drop in Cable. In addition to that, risk aversion hit the spotlight again as EU finance ministers failed to come to a conclusion regarding Greeces bailout.
Ugh, sentiment is as fickle as well, me. One day traders are all happy and giddy buying up the pound, the next theyre selling it off because of risk aversion! Geez Louise, they cant make up their minds!
So what was the outcome of my long GBP/USD trade yesterday?
Stopped out at 1.6320: -50 pips / -0.50%
While it was an emotionally painful loss, the hit to my account was relatively small. I knew beforehand that my entry was a bit aggressive so I reduced my usual position size. Lets see if this next trade idea I have will be able to bag me some pips
Trade Idea: 2011-6-16 00:14
Rrrr! With USD/CHF chillin near the minor psychological handle and Stochastic showing a bearish divergence (making lower highs while price is making higher highs), you cant imagine how tempted I am to short the pair at market!
Zooming out to the 4-hour time frame, we see that price is actually testing resistance at the 38.2% Fibonacci retracement level and Stochastic is already indicating overbought conditions.
So I this is how Ill play this setup:
If the fundamentals line up with my bearish bias, Ill wait for USD/CHF to stage a strong break below .8500 and place my stop above yesterdays high around .8560. Ultimately, Ill be aiming for the all time-lows at around .8325.
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