September 7, 2011 Forex Trade Signals

The SNB stated that it will set its minimum EUR/CHF exchange rate target at 1.2000. EUR/CHF gapped higher which helped GBP/USD to rally to a high of 1.6207 during the morning session. GBP/USD was sold off aggressively soon after though as the usual concerns over Europe resurfaced and apprehension built up ahead of Germany’s Federal Constitutional Court decision which is due this morning and will rule on whether the country broke the law when it agreed to bail out Greece. European stocks continued to fall as investors shunned risk for a second day and GBP/USD went with it. Cable fell below 1.6000, triggering stops on the way to a low of 1.5935. US ISM non-manufacturing ISM data came in better than expected too on Tuesday which supported this move lower in cable. The pair has recovered only slightly this morning, this recovery not helped by the release of weaker than expected UK Halifax house price data overnight. The figures showed that UK house prices dropped by 1.2% in August. GBP/USD opens this morning at 1.6005.

The reaction to the SNB announcement yesterday was clear. EUR/USD bounced to a 1.4250, but it didnt last. The worry among investors over the state of the European debt crisis seems to be deepening in the run up to the German court decision on a lawsuit which challenges Germanys involvement in the Greek bail-out plan and the establishment of the European Financial Stability Facility back in the Spring, a decision in itself that is not helping to restore investors confidence in the European economy and the way in which the crisis is being dealt with. If the judgement agrees with the plaintiffs it is likely to see another bout of risk aversion spread through world markets. As equities slumped further yesterday EUR/USD fell back below 1.4100 and 1.4000 to a low of 1.3960. It has recovered slightly this morning in line with European stocks. The Stoxx Index has risen 1.8% already this morning and EUR/USD trades at 1.4100. Against the pound, the euro pushed higher yesterday following the SNB announcement to a high of .8820. It has settled back since and opens up the European session at .8815.

Now, on to our open positions and new trades. Lets take a look at the specifics:

Open Orders

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New Orders

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