Michael Bridgman

USD strength has continued for a third day going into the non-farm payroll release tomorrow.

Earlier in the week the ECB’s chief economist Lane commented that the ECB does pay attention to the exchange rate. This has brought some Euro shorts into the market in advance of the ECB meeting next week.

With the majority of the market caught off side, the EURUSD has been pulling back. In August the pair had two pullbacks in the 200 pip range. With 1.2000 rejected on Tuesday, many bulls will continue to remain long above 1.1800. A close below 1.1800 and another close below 1.1750 may cause the tide to change abruptly… with capitulation ensuing and a potential domino effect.

Today a short was taken in the higher octane EURJPY cross as upside momentum faded… risking 20 pips for a potential 100 pips to our daily target at 1.2483.

Price moved lower but left a long lower wick after the first candle, so we removed the risk from the trade by placing our profit stop to plus 2 pips. Price continued lower but bounced at its Asian session low and we closed the trade after giving back 13 pips.

Trading the higher octane JPY crosses requires a great deal of discipline and money management as the stop and reverses occur frequently and abruptly. The last time I traded the AUDJPY was during the early and extremely volatile days of the pandemic and my stop loss was hit in about 30 seconds after my entry. The market has calmed down considerably since then but these pairs tend to be volatile.

All eyes will be on the U.S. Non-farm payroll tomorrow, so be cautious and nimble if you’re trading in advance of it.

Good luck with your trading!

The USD continued to attract more bears than bulls this summer during July/August and this was especially notable in the EURUSD move. In August the pair tried twice to close above 1.2000 but failed. The GBPUSD has also moved up and the Sterling bulls continue to anticipate a close above 1.3500.

Fresh back from vacation this week, and to start the month of September, my attention was on the USDCAD which was finding buyers near the 1.3000 figure as it tried to push lower in advance of the U.S. session.

A long was taken risking 18 pips for a potential 59 pips to our daily target at 1.3069 as price moved off its lows of the day to stay above 1.3000.

As price began to move higher, we removed the risk from the trade by locking in profit in advance of the U.S. economic news releases. The better than expected ISM Manufacturing PMI helped the USD move higher.

September has arrived and we are just over a couple of months away from the U.S. election on November 3rd. The market volumes will pick up as traders begin to return from summer holidays. The Nonfarm Payroll release will be out on Friday and next Monday will be a holiday in North America.

Keep an eye on the big numbers for clues to USD strength and weakness.

Good luck with your trading!

The GBPUSD moved lower to start the U.S. session but reversed higher as the 1.3100 figure was tested. After the completion of a three candle reversal pattern a long was taken risking 22 pips for a potential 77 pips to our daily target at 1.3177.

Price moved higher and gained momentum as it moved to and through our target going into the U.K. close – where we exited.

The strength in the USD that came after the FOMC yesterday began to fade somewhat today. Friday will be a busy day for economic news releases. Will the DXY hold above 92.50 going into the weekend?

If there is a good trade tomorrow, I will post it. Next week, I will be off on holidays and will return at the beginning of September.

Good luck with your trading and stay healthy!

The market is long the Euro and short the USD leading up to the FOMC meeting minutes today. Without Congress agreeing on a stimulus package there is little reason to be USD bullish at the moment. The trade agreement between the U.S. and China is in question again and President Trump’s reelection is also in question.

The EURUSD made three lower highs today as it tried to climb toward the large 1.2000 psychological number. After three candles in the U.S. session made lower highs, a short was taken risking 20 pips for a potential 61 pips to our daily target at 1.1868.

Price dropped taking out its Asian session low and the 1.1900 figure. Just above 1.1885 buyers began to enter and we closed the trade well in advance of the Fed.

The question for euro longs will be whether the pair can close above 1.1900 for the day and move up toward 1.2000 tomorrow or if a move lower to 1.1850/1.1800 area is the next support.

When the majority of the market is weighted in one direction, a move in the opposite direction can create a trading frenzy, as profits begin to erode quickly and a vertical move can follow.

The month has been a slow grind overall which is not uncommon in August. Equity markets continue to make new highs which is uncommon in the summer.

Good luck with your trading and stay healthy!

The news calendar was light to begin Monday’s trading. After falling in the first half of the U.K. session, the GBPUSD began to find buyers near 1.3020 and began to push higher. A long was taken risking 20 pips for a potential 95 pips to our daily target at 1.3130.

Price moved higher pausing briefly at its Asian session high then moved up to the 1.3100 figure… where it stalled and began to fade. We closed the trade after the bearish engulfing candle, not wanting to give back any more of our gain.

It’s a busy economic calendar for the rest of the week. If the USD can continue upward, expect a test of the 1.3000 level.

Good luck with your trading!

The GBPUSD broke to the downside today and moved to our daily target at 1.2990 before quickly bouncing back above the 1.3000 figure.

A long was taken with a stop loss just under the day’s low as price was able to gain momentum upward. As the U.K. session ended price was testing its Asian session low and we closed the trade.

It will be interesting to see if the USD can regain some upward momentum in August. The 92.50 area of the the DXY will be near term downside support. Friday’s NFP number will be very closely watched as will the number of new infections in the U.S. versus Europe and Britain.

Good luck with your trading!