Michael Bridgman

The markets have a lot to digest at the moment. The U.S. – China trade talks appear to be progressing positively and Britain is still hoping for a “soft Brexit” as the March 29th deadline gets closer and closer.

Unfortunately for British P.M. May, she is not getting the required cooperation in parliament to make the transition from the E.U. conciliatory. The drama continues to unfold and the GBP is very volatile as a result.

With a weaker USD again today, but no signs of panic in the markets, a long was taken on the EURJPY after it found a bottom in advance of the U.S. session and made a higher low after the U.S. core inflation release. The trade required a stop loss of 16 pips for a potential 44 pips to our daily target at 125.81. Price moved initially lower after our entry, but was able to continue higher and move through its Asian high. We continued to move our profit stop up and just before the U.K. close our target was reached.

On Monday, there were mixed signals as we started the new trading week.

With the USD on its back foot from Friday’s NFP miss and slightly stronger oil prices…a USDCAD short was taken risking 11 pips for a potential 62 pips to our daily target at 1.3367. Price had run into sellers above its Asian session highs and began to descend. Price moved lower passing through its Asian session range until a long lower wick appeared as price found its bottom. We tightened our profit stop to the open of the previous candle and the trade was closed as a move to the upside began.

In my opinion the USD weakness the past 3 days is not an indication of a trend change. If Brexit can be worked out amicably however, there is room for the GBPUSD and EURUSD to move substantially higher very quickly. For anyone that was looking yesterday, the GBPUSD moved up about 100 pips in a few minutes early in the Asian session. This move was generated by a favourable headline about an agreement being reached between Britain and the E.U. Of course, parliament didn’t give it consent today, so there will be a new vote on Wednesday and potentially another vote on Thursday. Be extremely cautious trading either the GBP or EUR at this stage.

Good luck with your trading!

With a stronger USD and the GBPUSD rolling over as the U.S. session got underway, a short was taken risking 16 pips for a potential 66 pips to our daily target at 1.3142.

The pair had gapped higher as the markets reopened this week, oscillated sideways throughout the Asian session and moved mostly lower during the first half of the U.K. session.

Price moved lower as the U.S. session progressed but price was unable to close beneath Friday’s low, as buyers entered moving price up and closing our trade

Where will the USD go from here? President Trump’s criticisms of Fed Chair Powell did little to weaken the USD. Although modestly stronger today, events this week including a number of economic releases scheduled for Tuesday, the outcome of the ECB on Thursday, followed by the NFP number on Friday may cause some volatility. The market remains very optimistic about the U.S. – China trade talks outcome by month end.

Good luck with your trading!

The USD is benefitting from optimism regarding progress with the U.S. – China trade talks. There is no agreement yet, but with the tariff deadline lifted this week by President Trump, the USD has been strengthening for three days now…and gold has been collapsing.

Earlier in the week, we saw the GBPUSD jump upward on optimism regarding Brexit, but the recent highs have not been sustainable because there still is no agreement and the deadline remains March 29th – at this stage.

As long upper wicks formed in the U.S. session overlap, a short trade was taken risking 15 pips for a potential 88 pips to our daily target at 1.3175. Price did not drop like a rock, but it came down somewhat vertically until a candle formed with a long lower wick…which was a warning to us to tighten our profit stop – as buyers were entering. Price moved only slightly higher and closed our trade as the U.K. session wound down.

The GBPUSD will likely be very active this month as the Brexit deadline approaches and rumours abound as to how the future will unfold. The pair has the potential to run to 1.4000 as it does to 1.2500 or 1.2000 depending on how this divorce concludes. Another option is the less volatile but active EURGBP pair.

It should be an exciting month.

Good luck with your trading and enjoy your weekend!

Most Wednesdays, the U.S. Crude Oil Inventories are released. If there is a surprise shortfall…like today…we are likely to see the price of WTI go up and the Canadian dollar benefit. If there is a surprise surplus, then we likely to see WTI move down and the Canadian dollar move down.

Today it looked to me like the USDCAD had found a bottom and was moving higher. A long was taken risking 12 pips for a potential 70 pips to our daily target at 1.3199. It was an aggressive entry because the inventories release was pending. Price moved higher and paused in its ascent just before the release. Allowing for some minor volatility, the profit stop was moved to halfway down the previous blue candle. The news was released and with a very large shortfall in inventories, the pair reversed… closing our trade as WTI jumped up. It’s never fun giving back pips but trading in front of news seems to do it more often than not.

Good luck with your trading!