Archives for January 2021

Shorting the USDCAD in advance of the North American session news

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This pair typically trades well during the North American session because it’s the currencies of two trading partners in the same time zones.

Today the pair set up nicely for a short two hours into the U.K. session… requiring risk of 14 pips for a potential 79 pips to our daily target at 1.2769.

Price began to move lower and the first level to get through was the Asian session low, then the 1.2800 figure, yesterday’s low and on down to our daily target.

With numerous economic news releases for the U.S. and Canada today, when the pair paused at the 1.2800 figure, we exited to avoid any news related volatility.

Enjoy your weekend, stay healthy and good luck with your trading!

Shorting the GBPUSD as USD strength precedes the FOMC in a “risk off” trading environment

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The USD had a very strong day and risk off sentiment prevailed.

The higher trending GBPUSD moved down at the U.K. open to test its Asian session low…where it bounced higher. As it began to roll over again after making a lower high, a short was taken risking 16 pips for a potential 72 pips to our daily target at 1.3658.

The pair moved lower through its Asian session low again, retested the level and moved down through the 1.3700 figure. With U.S. session news pending and anticipating dip buyers at the 1.3700 figure, we protected our profit and the trade was closed on the retest of the figure… leaving the majority of the move that followed for other traders.

US GDP and Initial Jobless claims are due out on Thursday.

Good luck with your trading!

Long the EURUSD as the DXY moved lower today but stayed above 90.00

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After moving down during the Asian session, the EURUSD moved higher at the beginning of the U.K. session… which is more often than not a trap. We awaited a pull back which completed with a reversal pattern. A long was taken risking 11 pips for a potential 41 pips to our daily target at 1.2173.

Price moved slowly higher to test its Asian session high, where we moved our stop loss to a profit stop as the U.S. session was about to get underway. Price made a brief surge higher then moved sideways awaiting the CB consumer confidence release. Price moved higher after the release to our target where we exited the trade.

The majors were looking very tradeable today as they were moving with strong correlation to each other.

Concern regarding the U.S fiscal stimulus package, vaccine distributions and covid variants continue to weigh on the markets.

The U.S. core durable goods orders are scheduled for release tomorrow followed (after the U.K. close) by Fed Chair Powell’s statement.

Good luck with your trading!

Shorting the AUDUSD as the USD moves higher to begin the trading week

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The AUDUSD had moved up in the Asian session, pulled back when the U.K. session got underway, made another attempt to move higher but formed a lower high and faded into the U.S. session open. As the U.S. session got underway, the pair ran into sellers near the .7730 area and made a third lower high.

A short was taken risking 10 pips for a potential 35 pips to our daily target at .7687. Price moved lower to test its Asian session low, Friday’s low and the .7700 figure.

Price continued lower to our target where we exited the trade.

A short on the NZDUSD would have netted a very similar result.

Tuesday we have the CB consumer confidence release in the U.S. and Fed Chair Powell on Wednesday to look forward to.

Good luck with your trading!

Shorting the AUDUSD after disappointing retail sales for Australia

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Trading was a little slow this week for me, which began with the Martin Luther King Jr. holiday on Monday in the U.S. followed by the inauguration of President Biden on Wednesday.

Australia on Friday, posted disappointing retail sales (MoM). The AUDUSD tends to correlate well with U.S. equities and equity futures which signaled a risk off sentiment.

A short was found as the AUDUSD made a quick move up after the London open (the trap) and was rejected at yesterday’s low. The trade involved risking 10 pips for a potential 30 pips to our daily target at .7702… just above the figure.

Price moved lower through its Asian session low, where we took the risk out of the trade, but allowed for a retest of this level. Price continued lower, slowing down in advance of the U.S. open, before dipping further to close the trade at our target.

What has changed this past week? The U.S. is now under a new administration with President Biden. Vaccine supplies have been less available than desired, but are rolling out. The ECB event went largely as expected. Governor Bailey in Britain said that a decision has not been taken on negative interest rates, but it does make sense to have them in the toolbox…

Good luck with your trading, stay healthy and enjoy your weekend!

Shorting the USDJPY in advance of Fed Chair Powell speech today

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The USDJPY made an attempt to move higher at the U.S. open but failed to challenge its Asian session high. It subsequently made a lower high with one of my favourite 3 candle reversal patterns. We entered short risking 12 pips for a potential 46 pips to our daily target at 103.56.

The first area to get through was the 104.00 figure. Price moved lower without retesting the figure and found some buyers as it approached its Asian session low. We gave it some room to test this level and price continued lower. We exited the trade at the U.K. close in advance of Fed Chair Powell’s speech at Princeton.

Traders will be listening to Fed Powell’s speech for any clues as to interest rate hikes in the foreseeable future, inflation expectations and any dovish remarks. This may take the wind out of the sails of the recent USD strength, but the core retail sales and core PPI numbers tomorrow will also be important.

USDCAD and EURCAD were tradeable today but required larger stop losses.

Good luck with your trading!