Michael Bridgman

It appears that many traders have been sitting on their hands as uncertainty continues regarding the U.S. – China trade tariffs eventual outcome, Trump versus Iran, how Boris Johnson who is the odds on favourite to replace Teresa May as Britain’s next prime minister, will succeed where she failed, and why the Euro is suddenly more attractive than the USD.

Since the FOMC meeting last week the USD has had its largest decline in four months and gold has surged, the most in three years.

After a large move down during the Asian session today, the EURJPY failed to move higher during the U.S. session overlap and a short was taken risking 6 pips for a potential 24 pips to our daily target at 121.72. Price moved lower, we moved our profit stop down and very quickly our trade was closed as our target was reached.

Trading has been challenging as USD bulls continue to be squeezed out of the market, but we do have a U.S. President like none other. If the major pairs seem difficult to trade, there are always the yen crosses.

Good luck with your trading!

Since Teresa May resigned as Prime Minister, what has changed regarding Brexit uncertainty?

As Boris Johnson appears to be the odds on favourite at this stage of replacing May, is that likely to lead to GBP strength or weakness? Mr. Johnson is portrayed as a hard Brexiteer which suggests GBP weakness until more is known.

Today as the GBPUSD made a brief new high for the day early in the U.S. session overlap and failed, a short was taken risking 19 pips for a potential 54 pips to our daily target at 1.2686.

Price moved slightly lower then sideways before breaking quickly to the downside reaching our target at the end of the London session.

If price continues lower, look for buyers near the May 31st low 1.2558 area and beneath that, near 1.2500 for now.

Good luck with your trading!

These are tricky times to trade and trends may be changing.

Despite a surplus in crude oil inventories this week, the USDCAD moved lower today. As it failed to stay above the 1.3400 figure, a short was taken early in the U.S. session risking 12 pips for a potential 33 pips to our daily target at 1.3463.

Price moved lower to our target before the U.K. close and we were happy to have an intraday trade this week that moved over 20 pips. A long taken yesterday after the crude oil inventories announcement ended up netting us 1 pip.

Having been a USD bull for months and months, I am now neutral on the USD.

The U.S. economy continues to be strong, but less strong than a year ago. The Federal Reserve raised interest rates to prevent the economy from becoming overheated…and it worked. President Trump has been highly critical of the Fed and outspoken about wanting interest rates lower. The U.S. is certainly in a position to lower interest rates and now the market believes the first interest rate cut is imminent…possibly this month or next.

The failure thus far of a trade agreement between the U.S. and China, after the White House had been reporting that an agreement was very near – and then wasn’t, didn’t help the global financial confidence.

This week White House economic advisor Kevin Hassett resigned. Mr. Hassett has been a proponent of free markets and free trade…not a popular stance with the current president.

President Trump’s notion of imposing new tariffs on Mexican goods imported into the U.S. casts doubt on negotiated trade agreements with the U.S. The trade protectionist policies now appear to be having a detrimental effect on the USD. This too may please the president, as U.S. exporters will benefit. If interest rate cuts are announced by Chairman Powell, this will please Wall Street, but may add to further selling of the USD.

Tomorrow’s non-farm payroll release is likely to create volatility, so be careful.

Good luck with your trading!

Most of the majors are trending, but the daily ranges are confined and it’s been difficult the past couple of weeks to make more than 15 or 20 pips in a pair intraday. As a result, I have not been posting.

Today the GBPUSD gave us 25 pips to the downside. Risking 15 pips for a potential 49 pips to our daily target, we went short early in the U.S. session overlap. Price moved down to test yesterday’s low and continued lower. As a doji candle formed with a long lower wick, we tightened our profit stop to 25 pips and the trade was closed.

It seems that the U.S. – China trade talks lack of outcome has many traders on the sidelines for now.

British politics continue to weigh on the GBPUSD which may take out 1.2500 soon. The USDCAD continues to try to take out 135.00 and the USDJPY continues to move between 109.00 and 110.50 with 110.00 being a critical level. The EURUSD continues lower making lower highs and we will see if buyers come in above the 1.1000 figure. AUDUSD and NZDUSD are trending lower, but are moving a small number of pips each day compared to their normal range.

Tomorrow we enter month end and a week where the USD index has climbed each day. I would not be surprised to see it pulls back to test 98.00 before it climbs higher. Like the USDCAD, it may not be long it moves higher still.

Good luck with your trading!

The USD index continued to move higher today and we will see if it closes above 98.00 to end the week.

The Canadian dollar one would think would be having a good week too after favourable comments regarding the economy from the Bank of Canada’s Governor Poloz. WTI oil has continued upward this week, but the USDCAD continued higher. Is it because USD strength is offsetting the positive fundamentals of the Canadian dollar?

At 1.3500 the USDCAD tends to reverse lower. Today was no different and a short was taken risking 20 pips for a potential 49 pips to our daily target at 1.3444. As the reversal unfolded, price moved lower and appeared to bounce at its Asian session low. It is typical for price to test and retest certain levels, and on the hourly chart a very important technical level acted as support and our trade was closed protecting profits at this level.

It’s hard to know if the catalyst for the move lower today coincided with rumours circulating that the U.S. and Canada had come to an agreement removing U.S. tariffs on Canadian steel and aluminum. The 1.3500 figure continues to be formidable resistance for the USDCAD for now.

Monday is a holiday in Canada.

Enjoy your weekend and good luck with your trading!

The market appears to have turned its focus away from selling the USD this week, despite the rhetoric between the U.S. and China. On Monday the USD sold off and then bounced and has shown strength each day since.

The GBP remains mired in British political uncertainty and continues to offer short setups as it trends lower. On Wednesday an entry short was found risking 16 pips for a potential 54 pips to our daily target at 1.2845.

On Thursday we were able to risk 15 pips for a potential 57 pips to our daily target at 1.2773. Both trades were very similar and most major pairs are showing very familiar trading patterns once again.

The U.S. dollar index is approaching 98.00 today – where it has struggled to stay higher recently. It would not be unusual for it to pull back a bit tomorrow, if risk off sentiment resurfaces. The market will also be concerned about conflict between the U.S. and Iran escalating.

Good luck with your trading!