Michael Bridgman

Another short of the EURUSD as the USD strength increased modestly today

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As the U.S. session got underway the EURUSD moved higher but failed to close above its Asian session high and began to move lower after leaving a long upper wick. A short was taken risking 8 pips for a potential 37 pips to our daily target at 1.1168.

Would price be able to take out its March 7th 2019 low?

Price moved lower and we closed the trade at the U.K. close without price moving beneath 1.1175. If the USD can continue upward tomorrow this level will most likely be tested. It appears that the USD is running into some overhead resistance, so we may see it rest or pull back temporarily.

Oil continues to rise and we will see what effect the oil inventories will have on price tomorrow and the oil sensitive currencies.

The Brexit drama continues and GBPUSD bulls sit on the sidelines waiting for positive news. Most traders are avoiding the pair until the picture becomes clearer… and it remains as clear as mud at the moment.

Good luck with your trading!

Shorting the EURUSD as April begins with continued USD strength

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The USD strength is continuing as we begin the second quarter.

What has changed with Brexit other than a brief extension? The short answer is…nothing. PM May has not been able to get an acceptable deal through her own parliament, let alone the E.U. The GBPUSD moved higher today, but I prefer to only short the pair until an agreement is reached. Most traders are avoiding the pair.

The EURUSD made two lower highs early in the U.S. session and a short was taken risking 12 pips for a potential 33 pips to our daily target just above the figure at 1.1202. Price moved lower and our trade was closed at 1.1209 at the end of the session.

There was a “risk on sentiment” today as evidenced by the U.S. 10 year yield and equities.

The U.K. and Europe have finally moved their clocks ahead, and this coming weekend Australia and New Zealand will be moving their clocks back.

Good luck with your trading!

Shorting the EURUSD as USD strength continues today

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ECB President Mario Draghi confirmed yesterday that improvement in growth and inflation is still expected in the second half of 2019 and if that doesn’t happen, then the officials are ready to take action.

In advance of the U.K. open the EURUSD sold off, it then pulled back making a lower high and went sideways. As it broke to the downside once again, a short was taken risking 13 pips for a potential 60 pips to our daily target at 1.1188. Price began to move down quickly and closed beneath its Asian session low in advance of the U.S. open. We moved our profit stop down allowing for a retest of this level. Price continued lower as the U.S. session got underway and the first reversal candle closed the trade.

I continue to be USD bullish and Euro bearish. If the economic numbers continue to look more like they are pointing toward recession in the E.U. and not showing meaningful inflation, the EURUSD may test 1.1000 going forward.

Although the U.S. is slowing compared to last year, it is still growing and the Fed has flexibility with interest rates.

The U.K. continues to be unable to put forward an acceptable Brexit agenda. The Japanese yen continues to benefit only on risk off days, but gold has tumbled beneath $1300 once again with the rekindled USD strength this week.

Good luck with your trading!

The EURUSD has moved below the critical 1.1300 level and 1.1200 – 1.1175 levels may be tested.

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One week, we have USD strength, followed by USD weakness, followed by USD strength. It appears the bears and the bulls are both correct. Volatility and reversals are something traders needs to get accustomed to.

Fundamental analysis is very important but reading price and understanding simple technical analysis is how we make money and find trade setups. Money management and discipline are how traders survive.

Today the EURUSD moved up from its Asian session lows, but was unable to sustain above its Asian session highs. A short was taken risking 10 pips for a potential 70 pips to our daily target at 1.1245. Price moved lower and continued lower as the U.S. session got underway. We kept our profit stop tight and ended up being closed for a modest gain.

The market continues to be focused on the U.S. – China trade talks and Brexit outcomes. New potential scenarios are popping up daily with Britain, and this has kept the GBPUSD well above 1.3000 for the time being as a hard Brexit remains at bay. The yield inversion reaction appears to be a little premature in my opinion.

Note: My postings may continue to be less frequent over the next couple of weeks due to someone very close to me being very ill.

Good luck with your trading!

EURUSD moves back down in the U.S. session

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A slow Monday as traders await the FOMC on Wednesday.

After moving higher before the U.S. session, the EURUSD began to roll over as the U.S. session got underway. A short was taken risking 8 pips for a potential 42 pips to our daily target at 1.1308. Price moved slowly lower and we lowered our stops above structure tightening just before the U.K. close… where we exited the trade.

U.S. – China trade talks drag on. Prime Minister May’s attempt to call a third vote in parliament on the Brexit deal is declined by House Speaker Bercow… unless it changes significantly. It’s fair to say that there is considerable uncertainty in the markets as we begin the week.

Good luck with your trading!

After 4 down days the USD moved higher today and gold moved back beneath $1300

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The situation in Britain continues to confound as parliament votes today to extend the deadline beyond March 29th. Even if passed by a majority in parliament, the E.U. can still say no Britain’s request. This uncertainty is keeping many traders away from the volatile GBPUSD.

As the U.K. session got underway and price attempted to rise above its Asian highs, sellers entered and price began to move lower. A short was taken risking 26 pips for a potential 182 pips to our daily target at 1.3125. Price moved lower then bounced at it’s Asian session low – leaving a long lower wick. We had removed the risk from the trade as soon as it started to move down and kept our profit stop very tight and it descended further. After a second candle left a long lower wick, we tightened our profit stop to the high of that candle… which caused the trade to be closed as price continued higher.

On Wednesday, before the oil inventories release, we went short the USDCAD…risking 12 pips for a potential 49 pips to our daily target at 1.3300 After a bearish engulfing candle and double-top price had moved down to its Asian session low. This level was retested before price descended quickly. A series of candles with long lower wicks began to appear in advance of the news release. We tightened our profit stop hoping for a continued move down, but our trade was closed as price moved higher after the inventories release.

The USD has been dropping since Friday’s NFP release and today is the first day that it has moved up since. The U.S. – China trade talks are looking like the negotiations may drag on into April at this stage, but remain positive.

Brexit uncertainty is not good for the GBP but a positive development could drive the pair vertically higher as many traders remain on the sidelines waiting for some sort of resolution. A negative development could drive the pair vertically down.

With the USD finally moving up today, gold gave back the $1300 level it had regained on Tuesday.

Will the USD continue to move higher from here? The market needs to digest that while the U.S. economy is slowing compared to last year, it is still very strong. U.S. interest rates are not likely to go higher this year, but the bond yields remain considerably higher than the alternatives of Europe or Japan. The German economy is potentially headed into recession and Japan is in no position to raise interest rates, nor is the U.K. The commodity currencies carry inherent risk as global growth – especially China slows down. It’s never a good idea to fight the market, but I continue to be USD bullish.