Michael Bridgman

EUR short setup early in the UK session.  With the markets very reactive to China this week, we look for the EUR to settle back to trend.  We take a larger than usual stop loss due to the larger ranges being made this week.  The short is taken with a 28 pip stop loss for a potential 107 pips to our Target 2.

With price being so volatile, we get the risk out early and move our stop loss to plus one pip.  As price moves down, we lock in more profits and want to be out of the trade before the U.S. economic releases.   We exit at Target 2 just in advance to the U.S. positive core durable goods release.

More U.S. numbers tomorrow.

Good luck with your trading!

Back tomorrow if we find a trade.

At a favourite time of the UK session, it was evident that the USD was weakening.  The USDCAD had a nice double top for the session and a  triple top for the past 24 hours.

As the other majors showed similar strength to the USD…  the CAD looked like a compelling short opportunity.  A stop loss is placed above yesterday’s high as we enter short.  The stop loss was 16 pips for a potential 116 pips to our Target 2.

In advance of the first US economic news release, we locked in profits by placing our profit stop at the Asian high to guarantee 20 pips on the trade. Price dropped after the unemployment print and then formed a wicky candle as buyers entered long.  We tightened our profit stop to just above the candle high and the subsequent candle closes the trade.

 

Good luck with your trading!

It’s been a quiet summer week leading up to the FOMC yesterday.  The Bloomberg issue was more interesting than the release itself.

Back tomorrow if we find a trade.

On Friday after an initial selloff to begin the UK session, the EUR found a bottom and began to move up.  The pair has been in more or less a range between 1.0800 and 1.1200 for the past month.  This translates to selling near the highs and closing the positions near the lows for institutional traders.

As it climbed during the UK session it ran into sellers at the previous day’s high creating a double-top.  A very bearish engulfing candle was the reversal sign needed for a short entry.  As we has a vertical move up, we hope as we enter short, that the downside move will be vertical too.  The wild card was the pending U.S. economic news releases.  We move our stop loss to plus one pip just in advance of the news and await the market’s reaction. Price continued lower  and bounced creating a double-bottom for the session – leaving a longish wick where we close noting a familiar pattern completed.

Although our Targets 1 & 2 are significantly lower, we recognize that at this time of day on a Friday, chances of the 1.1100 figure being taken out today is unlikely.

It’s been nice to have the markets focus on the China story this week – something other than Greek solvency issues that have dragged on this summer.

Good luck with your trading.  Enjoy your weekend!

Back next week when we find a trade.

The USDCAD tends to be active during the American session.  After the positive economic releases for the U.S., China devaluing the yuan by 2% and WTI dropping 4%, a trending move higher for the USDCAD set up nicely.

At the this time of day a 2:1 R/R is acceptable.  We risk 18 pips for a potential 51 pips to our Target 2.

We moved our profit stop up after the Asian high gives way and is retested.  We protect Target 1 once realized and Target 2.  As the London session ended we closed the trade.  As a position trade the USDCAD may test 1.35oo in the not too distant future.  The key will be to watch the price of oil and if it rebounds and starts to move up, a tight stop would be prudent.  The China news has brought the commodity currencies into focus.

Good luck with your trading!

Back tomorrow if we find a trade.

 

Although there is lots of upside potential for the USDJPY – the 124.50 – 124.60 level has been a psychological barrier.   This pair lately has been moving predictably between the figures and the 50 pip increment levels.  It finally pushed through yesterday and closed well above its resistance zone, so today we would expect it to retest it.  In trading currencies, once a significant level is broken, a patient trader will see the level retested with approximately 80% certainty.  It is after the retest that we can determine if sentiment has really changed or not.

Today the JPY was unable to gain any momentum above its Asian highs and as price began to roll over in the US session, we go short with a stop loss just above structure and look for the retest of the 124.50-60 area.  As price moves down, we move our profit stop down.  As the UK session ends we exit the trade.

 

Tomorrow is NFP Friday and with lots of CAD news too…the USDCAD will likely be very volatile.  If the employment numbers are very good for the U.S. then we would expect to see the USDJPY move upward to the 125.00 figure and above next week and to test its June highs.

Good luck with your trading!

Back next week.

 

As the GBP rose to test its Asian session high, it ran into sellers and a short entry sets up.  With a 13 pip stop loss and 76 pips to our Target 2, the trade offers a very attractive reward to risk ratio.

Price moves down and long lower wicks begin to appear near the Asian session low.  We tighten our profit stop and note how buyers are entering in the area of yesterday’s low.  We allow for price to retest the Asian low level, but as it climbs above it – our trade is closed at our profit stop.

 

This pair has been ranging recently in advance of its next large move.  We are watching it closely.

Good luck with your trading!

Back tomorrow if we find a trade.