FX Trading - Living on the Edge

We have an interesting day lined up for the fx markets, as Germany hits us with its CPI data before UK releases its GDP numbers. The US will not be left out and will be handing us Consumer Confidence data during its trading day. Also, St. Louis Fed Presisdent Bullard will be talking again; remember a couple of days back he expressed his disapproval of the 'extended period' of low rates, pointing to risks of a liquidity trap. 

In anticipation of all this excitement, we went long both EURUSD and GBPUSD! Fundamentals aside, we saw both pairs bounce from the lower end of their recent ranges and deem it a good enough reason to buy. See charts below:

GBPUSD, recovering back above 1.6000 (so far)

EURUSD, recovering from a drop near 1.4000.

Fundamentally, an argument can be made for the currencies either way, so we'll just trade what we see, mindful of being proved terribly wrong, so we have stops in place and stand ready to act. That said, we may adjust our EUR stop at 1.4015 and GBP stop at 1.5960 as we approach the data releases, depending on where prices are trading.

Amongst all the news floating around, the most interesting to me at least is Siemens' restructuring plans which will include a public listing of its unit, Osram. The world's 2nd largest light bulb producer is said to be worth between 5-7 billion euros, and the ipo will probably take place in fall this year. Interesting to me simply because I use a bunch of their bulbs :)

So today, while officials from 40 countries (quick, name any 40 countries off the top of your head) meet in London to discuss the future of Libya, and the Japanese face a partial nuclear meltdown, we'll be watching markets closely and arguing about rates and USD strength/weakness and such - what joy.

Peace.