Michael Bridgman

Shorting the GBPUSD as it moves lower after reaching 1.2700

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After initially moving higher today, the GBPUSD failed to close above the 1.2700 figure and began to move lower.  Although tempted to enter earlier… waiting for the U.S. session economic news to be released still allowed us an entry, risking 20 pips for a potential 102 pips to our daily target at 1.2572.

As price moved down, we protected our profits moving our profit stop lower.  Price made a double-bottom beneath yesterday’s high and the next candle closed our trade for modest profit.

Tomorrow the major event risk will be the FOMC economic projections statement and rate increase announcement.  Jerome Powell is widely expected to raise rates by 25 basis points despite President Trump’s vocal objections.  Traders will be listening carefully for clues as to how healthy the U.S. economy is projected to be in 2019 and how many future rate hikes can be anticipated.

Good luck with your trading!

Shorting the GBPUSD to end the trading week

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The GBPUSD dropped at the beginning of the U.K. session, pulled back to its Asian session lows and dropped again.  A short was taken rising 18 pips for a potential 81 pips to our daily target at 1.2508.  The 1.2500 figure is an area where buyers have been entering this week…so be careful near it by protecting your profits.

My preferred direction is to short this pair as Brexit issues persist coupled with British political furor.  In the meantime P.M. May still has her job and will continue to negotiate Brexit with the E.U.

The markets closed  the week with a “risk off” sentiment.  Global equity markets closed down as did the U.S. 10 yr yield.

Good luck with your trading and enjoy your weekend!

Two trades this week as the USD begins the week bid

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It’s nice to see the USD moving higher as the week began.

On Monday with a very strong USD and crude oil WTI moving lower a long was taken on the USDCAD risking 22  pips for a potential 77 pips to our daily target at 1.3416.  Price moved up quickly to Friday’s high and but was unable to close above and left a long upper wick.  Price again failed to close higher, made a lower high and we closed the trade with 30 minutes left in the UK session.

On Tuesday, the USD was moderately stronger and after an initial move higher in the first half of the U.K. session, the EURUSD began to fade.  Not wanting to enter right away as there was U.S. economic news pending, we waited as price pulled back through its Asian session high.  We entered short risking 19 pips for a potential 48 pips to  our daily target at 1.1320.

Price moved rapidly lower and as it touched 1.1320 our trade was closed.

The GBPUSD remains very active, but the stop losses have been too large for my comfort zone so far this week.  Rumours that Teresa May’s days as the Prime Minister may be coming to an end, could cause the GBPUSD to experience a  short term bounce.  The pair has been finding buyers at 1.2500 this week. The negativity toward a positive Brexit outcome and where Britain will go from here if P.M. May is replaced, may cause a further move down.  Markets tend to be wary of uncertainty.  Be very cautious trading this pair, but my preferred direction is short when the setup presents itself.

Good luck with your trading!

Shorting the GBPUSD after the early countertrend move higher

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The GBPUSD is a very active pair lately with all the concerns surrounding Brexit.  It is also potentially very volatile and is best traded with very tight stop losses.  Having moved higher in a countertrend move early in the U.K. session and having made its topside range, it would likely set up for a short and a move back down… in the direction of its trend.

During the second half of the session, the pair made a lower high and an entry short was taken risking 17 pips for a potential 93 pips to our daily target at 1.2671.  As price moved lower, we removed the risk from the trade and continued to lock in profit.  The pair moved down with a candle closing beneath its Asian high.  We allowed for a retest of this level but the bounce higher closed the trade as buyers emerged.

U.S. markets were closed today to honour former President George H.W. Bush.

The USDCAD continued higher as the Bank of Canada left interest rates unchanged today and oil prices remain about 25% off their recent highs.  With talk of production cuts, it remains unclear as to when the oil producing countries will start their cuts and what President Trump will tweet if oil begins to trend upward.

Good luck with your trading!

 

 

Some days it’s just too tempting to short the GBPUSD

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I read a quote today from a trader who described the cable as having two types of days lately: ” 1. days where it falls, and 2. days where is makes gains then gives them all back later”.

The political drama in Britain continues and Brexit is anything but a done deal.  This pair will remain vulnerable to headlines, but today after making a third lower high and entry set up early in the U.S. session for risking 18 pips for a potential 80 pips to our daily target at 1.2718.

It’s very hard to make a case for being long the GBPUSD at the moment. If an entry can be found requiring a small stop loss and at least a 2:1 reward for the risk in a short setup, then it is hard for me to resist…especially after missing Monday’s move due to a pending economic news release which ultimately fell on deaf ears.

Any positive news regarding Brexit has the potential to reverse the pair in a blink, so keep stop losses tight and lock in profits.

There is lot of talk about the yield curve tightening in the U.S. bond market and therefore hinting at a recession.  Although the stock markets sold off heavily today, keep in mind that the signal may be flashing… but the slow down may still be a year or two away.  With investors already worried about the global economy, the reaction may be a little exaggerated today and the president’s tweet didn’t help either.

Good luck with your trading!

The markets awaits the outcome of the G20 meetings especially the Trump-Xi “deal or no deal”.

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It appears the market overreacted to Fed Powell’s comments on Wednesday and the USD is strong today as November comes to an end.  All eyes are on the G20 meetings in Argentina as politicians attempt to resolve their differences with other nations.  The outcome of the U.S. – China “deal or no deal” talks will set the tone for what’s to come next.

The EURUSD which made a strong countertrend move on Wednesday softened today and we entered short risking 10 pips for a potential 49 pips to our daily target at 1.1321.  Price had made a series of lower highs and an entry was found in advance of the U.S. open.  We protected our profits as price moved lower and the Chicago PMI release gave us the final push to our daily target, where we closed the trade.

Next week will be an active one!  Fasten your seat belt.

Good luck with your trading!