Hot Currency Trade - 11/11/08

Entry: Sell GBP/USD at market
Target: 1.5300-1.5350 (October 24, 27 lows)
Stop: Above 1.5690/1.5700 (intraday trendline resistance)

This is actually the opposite of my trade from yesterday, as I was looking to buy GBP/USD on a break above 1.5800. However, we saw no such move as the pair remains under pressure from a combination of demand for safe-havens like the US dollar and the absolutely dismal UK economic and interest rate outlook. As a result, it may be worthwhile to stick with this trend and sell the pair, looking for a drop toward 1.5350. If selling GBP/USD at market, stops should be placed above 1.5690/1.5700.

Event risk will pick up for the pair on Wednesday as UK employment figures and the Bank of England's Quarterly Inflation Report will be released. Both of these announcements should have bearish implications for the British pound, but if you're trading on a very short-term basis with tight stops, it may be best to avoid holding positions at this time given the potential pickup in volatility.

Any trade recommendations, opinions, analyses, prices, or other information contained on this website provided to you by Daily FX or its affiliates represents general market commentary and does not constitute investment advice. Investment in foreign currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall, and past performance is no assurance of future performance.

The information provided here is for informational purposes only and is not real-time data. Accordingly Daily FX or its affiliates make no warranties or guarantees in respect of the content. The general market commentary provided do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations provided here. Hence, Daily FX or its affiliates will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.

Daily FX and its affiliates highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from independent sources.