Archives for March 2019

Shorting the GBPUSD ahead of the ECB

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ECB President Draghi was going to speaking today and the market was already bearish about the E.U. economic numbers. Germany barely missed going into recession and Italy is in much worse shape. Chances of hearing of an interest rate hike this year is not expected. The Eurozone is slowing more than expected and this continues to create downward pressure on the currency.

Not wanting to wait on the E.C.B. today, an opportunity to short the GBP presented itself, risking 16 pips for a potential 65 pips to our daily target at 1.3099. Price moved down but long lower wicks began to form before the U.S. open and E.C.B. Draghi’s eurozone commentary. Tightening our stop loss caused our trade to be closed at yesterday’s low as price retraced going into the U.S. open.

The USD gained more strength as the session continued and moved up to test its December high. Equity markets moved lower as “risk off” sentiment drove traders to safer asset classes.

Tomorrow we have the NFP release early in the U.S. session and it tends to create significant volatility – so be careful. Although the USD looks heavy at its current level, and the U.S. economy is slowing…it remains healthy and stronger than the alternatives. President Trump no doubt wants a weaker USD particularly with the record trade imbalance figure released yesterday but the market so far is not accommodating him this week. I remain USD bullish overall.

Good luck with your trading!

A stronger USD today despite further Fed criticism from President Trump of Jerome Powell.

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With a stronger USD and the GBPUSD rolling over as the U.S. session got underway, a short was taken risking 16 pips for a potential 66 pips to our daily target at 1.3142.

The pair had gapped higher as the markets reopened this week, oscillated sideways throughout the Asian session and moved mostly lower during the first half of the U.K. session.

Price moved lower as the U.S. session progressed but price was unable to close beneath Friday’s low, as buyers entered moving price up and closing our trade

Where will the USD go from here? President Trump’s criticisms of Fed Chair Powell did little to weaken the USD. Although modestly stronger today, events this week including a number of economic releases scheduled for Tuesday, the outcome of the ECB on Thursday, followed by the NFP number on Friday may cause some volatility. The market remains very optimistic about the U.S. – China trade talks outcome by month end.

Good luck with your trading!

Shorting the GBPUSD as it reverses in the U.K./U.S. session overlap

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The USD is benefitting from optimism regarding progress with the U.S. – China trade talks. There is no agreement yet, but with the tariff deadline lifted this week by President Trump, the USD has been strengthening for three days now…and gold has been collapsing.

Earlier in the week, we saw the GBPUSD jump upward on optimism regarding Brexit, but the recent highs have not been sustainable because there still is no agreement and the deadline remains March 29th – at this stage.

As long upper wicks formed in the U.S. session overlap, a short trade was taken risking 15 pips for a potential 88 pips to our daily target at 1.3175. Price did not drop like a rock, but it came down somewhat vertically until a candle formed with a long lower wick…which was a warning to us to tighten our profit stop – as buyers were entering. Price moved only slightly higher and closed our trade as the U.K. session wound down.

The GBPUSD will likely be very active this month as the Brexit deadline approaches and rumours abound as to how the future will unfold. The pair has the potential to run to 1.4000 as it does to 1.2500 or 1.2000 depending on how this divorce concludes. Another option is the less volatile but active EURGBP pair.

It should be an exciting month.

Good luck with your trading and enjoy your weekend!