Michael Bridgman

The JPY traded sideways in the middle of its Asian range until just before the US session.  As it broke convincingly, a long is taken with an 11 pips stop loss for a potential 45 pips to our Target 2 – the 1.2400 figure.

As price moved up, we locked in our profits and watched to see how price would react at the levels shown on the chart.  As price went through our Target 1 and began to reverse, we exit as it touches Target 1.

The JPY has been moving quite predictably of late.  A clear break of 1.2450 area will likely attract more buying.

The ECB/Greece outcome has the potential for producing some gaps when trading resumes for the new week.  Many position traders will not be prepared to take that risk and will close their positions in advance.

It is not our habit to trade Mondays, but this may be an interesting one.   When markets are this nervous and uncertain… either step aside or keep your stops losses extra tight and lock in your profits quickly.  Trade the setups with small stop losses and especially avoid the wild pairs.

Enjoy your weekend!

Good luck with your trading and we will see what next week brings us.

The JPY set up nicely as it tested its Asian session lows and found buyers.  With the potential for knee-jerk volatility being very high, my preference is to trade the setups in the direction of USD strength with the smallest stop losses.  As the JPY bounced convincingly off its Asian low a long is taken with a stop loss of 14 pips for a potential 84 pips to our Target 2.  This pair tends to get active during the US session but a nice setup had us enter in the sweet spot of the UK session.

As price rose we expect it to test and retest the Asian high.  We move our profit stop up allowing a few pips of wiggle room and anticipate the same for yesterday’s high just above.  As price makes a double top but still looks bullish, we tighten our profit stop not wanting to give back more than a few pips if it retraces from here in the last hour of our session.

The AUD set up nicely for a short entry after the US news. (not shown)  The Kiwi wasn’t nearly as good.

The ECB/Greece situation remains unresolved… so volatility is potentially very high on any related headlines.

Curiously of note, the USDCHF became quite active again yesterday.

Good luck with your trading!  Keep your stop losses tight and lock in profits as you go.

Back tomorrow if we find a trade.

As price came down after making a second lower high for the session, a short is taken.  The stop loss was 25 pips for a potential 73 pips to our Target 2.  A couple of pips short of our usual preferred 3:1 R/R… but the setup looked good.

We waited for price to test the Asian session lows and tightened our stop loss down to 15 pips in advance of the US news.  With a second positive U.S. economic release for the week, the USD strengthened further and price moved down to our Target 1.  As it began to retrace above T1 we closed the trade.

Good luck with your trading!  Be very cognizant of Greek deal related headlines.

Back tomorrow if we find a trade.

A JPY short, setup 30 minutes into the US session.  Yesterday the pair had moved down and tested the 122.50 area before finding buyers.  Today the pair could not get above its Asian high.  As the US session got underway it began to sell off.  With a 20 pip stop loss and a potential 85 pips to our Target 2, we like the R/R.  The idea is to get the risk out of the trade as soon as possible and lock in profit as the market moves in our favour toward our targets.

The first level to get through is the Asian low – followed by where price bounced yesterday, in the 122.50 area.  As price approached this level, buyers entered and a candle with a long lower wick prints.  We had placed our profit stop halfway down the preceding long red candle and the market closes our trade.

 

This week was challenging for finding good trade setups.  We will see what next week brings us.

Enjoy your weekend!

Back Tuesday if we find a trade.

 

Greece jitters remain and the EUR is showing surprising resilence.  The current 1 month implied volatility for the EUR is at the highest level since December 2011.

After the German ZEW release, the GBP started to move up and the EURGBP started to move down.

In general, I do not like to enter a trade in the middle of the Asian range.  If I have a confluence of reasons to – I am prepared to go for it.  Today, we had 3 lower highs, a reversal pattern, a poor German ZEW release, a better than 3:1 R/R, the GBP moving up, and Greek jitters simmering in the background.  A very affordable 15 pip stop loss made this trade very acceptable for its potential 50 pips to our Target 2.

After an entry short is taken price moved down…tested and retested the usual levels… which also included the .7200 figure.  Price continued down to our Target 2 as we protected our profits along the way.  As Target 2 is hit…we exit.

 

Tomorrow has lots of economic news as well as the FOMC during the US session.

Good luck with your trading!

Back tomorrow if we find a trade.

Early in the UK session the EURGBP moved down to test its Asian low.  It then went sideways for about 3 hours.  When the consolidation broke to the downside, we entered short with a 10 pip stop loss for a potential 47 pips to our Target 2.  As price moved down, we tightened our profit stop to lock in profits and mitigate volatility on this relatively subdued pair in the event of a new headline about the Greek debt issue.  The US economic releases were again positive for the USD and the pair began its continued descent.  As price tagged Target 1, we happily exited the position.

 

Good luck with your trading!

Be cautious around the US releases Friday.

Back tomorrow if we find a trade.