Michael Bridgman

Countertrend trades are tricky and tend to yield less in profit. If you haven’t mastered trading with the trend, then taking lower probability trades against the trend, should in my opinion be avoided. The market may be trending strongly as the USD has this year – making waves to the upside, but it won’t go up every day.

Today when the U.S. session got underway, the pair traded essentially sideways for the first hour bouncing above its Asian low area… up and down 15 pips or so. This range broke with a bullish candle higher just before the U.S. equity markets opened. A long was taken risking 23 pips for a potential 80 pips to our target at .9983. The pair moved higher, but couldn’t close above its Asian session high. It eventually pushed higher and we locked in some profit but allowed for another retest of the Asian session high. Price continued higher going into the European close enabling us to lock in more profit. After the first bearish candle we closed the trade ahead of the U.K. close.

On a day of USD weakness, we were hoping for a retest of par, but getting to our target level before the U.K. close would have been a great trade. If the pair moves above par, I am anticipating shorts entering around the 1.0050 area on renewed USD strength.

Good luck with your trading!

Britain has elected Liz Truss to be the new Prime Minister replacing Boris Johnson.

The U.S. economy remains very strong, as does inflation, which suggests another large rate increase from the Fed later this month.

The current trend for the GBPUSD is lower.

As the North American traders returned today after some August holidays and a long weekend, an entry short was taken after the first bearish candle close. We were willing to risk 20 pips for a potential 60 pips to our daily target at 1.1503.

Price pushed lower and we locked in profit in advance of the ISM Non-Manufacturing PMI release which took price to our target and beyond the 1.1500 figure.

Volumes will be picking up substantially this month.

Always be aware of the larger trends and don’t be blindsided by major economic news releases.

Good luck with your trading!

I have been reflecting back on conversations I’ve had over the years with institutional traders about when the EURUSD would reach par or move even lower. Many times a case has been made for the EURUSD to reach par in a given year… but it didn’t. We have a hawkish Fed and a dovish ECB by comparison. Could this be the year?

It was pretty amazing to see the USDJPY definitively break 130.00, then 131.00 and quickly ascend almost 600 pips. The EURUSD moved up to 1.0600 on its recent retracement and has quickly fallen to the 1.0150 area. All eyes are on par once again and there will be some buyers near that level. In the meantime the downtrend continues.

Today, taking advantage of the Euro downtrend came via shorting the EURCAD. The USD was slightly soft but the CAD was showing some strength.

As the North American session got underway the pair was consolidating as it had in the Asian session. When a period of consolidation breaks, price tends to move (but not always) back in its trending direction. A short was taken risking 20 pips for a potential 46 pips to our daily target at 1.3185.

Price moved lower and tested our target level but the spread was 2 pips and the trade didn’t close. On the second test the trade was manually closed.

Tomorrow the event risk will be the NFP release in the U.S. session and ECB President Lagarde will be speaking early in the EUR/UK session.

Good luck with your trading!

Lots of volatility as the second quarter and first half of 2022 come to a close.

A long was taken on the EURUSD risking 11 pips for a potential 51 pips to our daily target at 1.0468. This was a countertrend trade… hence a lower probability trade and a tighter stop loss.

An earlier entry could be found, but I was waiting for the reaction to the Chicago PMI release before entering. Price moved higher but stalled initially at its Asian session low before surging higher going into the European close. Price moved through our target going into the U.K. close and at the first sign of a pullback on the candle, the trade was closed.

Tomorrow will be a holiday in Canada. Monday will be a holiday in the U.S. Non-farm Payroll will be next Friday July 8th. Back Tuesday if I see something I like.

Happy Canada Day and Happy Fourth of July!

Enjoy your weekend and good luck with your trading!