Michael Bridgman

Trading has been a little slow since Wednesday last week for me and the market is giving some mixed signals. I find it better to be patient and disciplined than to force trades and regret the outcome.

The 1.3150 – 1.3250 area is an important range for the USDCAD at the moment. Today the idea was to take advantage of the weaker USD and slightly higher WTI price.

A short was taken risking 21 pips for a potential 62 pips to our daily target at 1.3154. We had to be patient with the trade, but it eventually began to move downward through its Asian session low, and we closed it at the end of the London session.

The U.S. – China trade talks have made sufficient progress for President Trump to lift the March 1st tariff deadline. He will be meeting for the second time with North Korean President Kim Jong Un in Vietnam to discuss the denuclearization of North Korea. Britain’s Brexit plans remain unresolved, but the GBPUSD is moving higher with optimism…not substance, which means it can drop like a rock if the pessimism resurfaces and a “no deal Brexit” seems imminent.

Lots of mixed signals as the market digests the bigger picture. Be very careful selecting your trade setups.

Good luck with your trading!

On Wednesday before the FOMC Meeting minutes, a trade was found in the USDCAD as it made a series of 3 lower highs – moving down to its Asian session low. Entering short we risked 14 pips for a potential 38 pips to our daily target at 1.3145 with 2 hours left before the London close.

Price moved down helped by WTI moving higher at the time and got very near our target price, but began to bounce before the London close – taking us out of the trade.

The reaction to the Fed. minutes was somewhat subdued and the USD closed positively for the day.

On Thursday, there were no trades for me as the market adjusted further to Fed’s outlook. Traders are now pricing in a 90% probability that the Fed will not increase rates in 2019. There is a 7% probability of a rate cut and now only a 3 percent probability of a rate hike.

On Friday ECB President Draghi will be speaking and traders will be listening carefully. Anticipate euro volatility as the market reacts to his comments – particularly if he is more dovish than the market anticipates.

I remain USD bullish, but not as bullish as last year at this time.

Good luck with your trading!

Overall the USD weakness was evident today but the reason for the selling was not obvious to me. Gold was very strong and equity markets were able to move higher with the exception of London. The GBPUSD moved sharply higher and did almost twice its range.

Having shorted the AUDUSD yesterday, today it was a long position risking 12 pips for a potential 41 pips to our daily target at .7156.

Price moved higher and began to roll over just as the London session was ending where our trade was closed.

Yesterday the USD didn’t have a lot of strength, but we found a short setup on the AUDUSD that we liked risking 6 pips for a potential 51 pips to our daily target at .7104. Volumes were much lighter with North America away on a holiday. Price moved down and our profit stop was hit well short of our target.

I’m not convinced the broad based USD selling today will continue, but I may be wrong. The U.S. – China trade talks resumed in Washington today. Events risks this week include the FOMC minutes on Wednesday and ECB President Draghi speaking on Friday. Canadian and Australian Governors Poloz and Lowe will be speaking on Thursday.

Good luck with your trading!

Early in the U.S. session the EURUSD surged higher then made a series of lower highs as it set up for a short trade. An entry was taken risking 15 pips for a potential 47 pips to our daily target at 1.1248.

Price looked like it could easily fall to its Asian session low which coincided with our daily target. Price had to make it through one level – a multi-pivot at 1.1268 (not shown) and then on down to our target. The USD strength was returning but price bounced twice unable to close beneath the level. We had a tight profit stop protecting 15 pips and it was hit.

Sometimes a trade looks really good but it doesn’t work out – that’s trading.

The market was a little erratic today as the U.S. – China trade talk headlines were somewhat negative, as they were last Friday.

We will know more tomorrow but any negativity may spook the markets going into the weekend. Be careful!

Good luck with your trading!

The USD had been very strong of late and yesterday it finally pulled back for a day. It continued higher today partly due to positive headlines regarding optimism with the U.S. – China trade talks, combined with another U.S. federal government shutdown being avoided.

After a third lower high in the EURUSD, a short was taken risking 11 pips for a potential 36 pips to our daily target at 1.1287.

On Monday the pair closed below the supportive 1.1300 figure, yesterday it closed back above it, but today it moved lower again. The November 2018 lows may be tested shortly if the USD strength continues.

Good luck with your trading!

The USD strengthened all week and China was on holiday celebrating the lunar New Year.

On Friday the news reported that a meeting between the presidents of the U.S. and China was unlikely to happen before the March 1st tariff deadline. Adding to that was U.S. economic advisor Larry Kudlow commenting that the two sides are still far apart in the trade negotiations. Adding to the tension is the U.S. pushing to ban Huawei, the Chinese telecom equipment maker from U.S. wireless networks, and also telling the E.U. to do the same or risk U.S. countermeasures.

In Europe soft economic numbers from Germany and the European Commission aggressively slashing it’s 2019 growth forecast for the Eurozone from 1.9% to 1.3% and Italy’s from 1.2% to 0.2% created a “risk off” sentiment for the markets.

A short was taken on the EURJPY early in the U.S. session risking 18 pips for a potential 62 pips to our daily target at 123.90 – as price closed beneath its Asian high. Price moved lower to test yesterday’s low before moving further to test its Asian low. Long lower wicks began to form as buyers entered and we tightened our profit stop as the London close approached. Our profit stop was hit – well short of our intended target but for a nice trade to close a quiet week of trading.

I have highlighted an area of the chart to show how quiet the U.S. session tends to be after the London close. It’s not always the case, but frequently price tends to consolidate and move sideways, unless there is something significant pending – like Fed. Powell scheduled to speak.

In trading it’s very important to be disciplined and follow a certain set of rules each day. If you have a solid trading plan and you’re consistent in your execution, then making profits and avoiding large losses is attainable. Some weeks will be more rewarding than others, but we never trade for the sake of trading.

Good luck with your trading and enjoy your weekend!