Michael Bridgman

An uneventful FOMC yesterday, a flat USD today and an air of caution going into the weekend

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There was not a lot to glean from the FOMC statement yesterday.  The market continues to expect a rate hike in December and likely 2 more rate hikes in 2019.  Whether or not the U.S. economy has peaked or not, it continues to be strong and the USD continues to attract buyers.  As the markets adjust to the mid-term election results implications and the latest statement from the FED, an air of caution was apparent today with the move down in equity markets and the U.S. 10 year yield declining.

The EURUSD looks like it may test 1.1300 again before long – where it may find buyers once again.  Today the EURJPY set up nicely for a short, risking 17 pips fr a potential 37 pips to our daily target at 128.83.  Price began to move down in the U.S. session overlap after it ran into sellers unable to reach yesterday’s low. Price moved down to test its Asian session low and continued to our daily target just as the U.K. session ended.

Good luck with your trading and enjoy your weekend!

 

Mid-term elections behind us and the markets are moving again

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The major event risk for the week was the outcome of the U.S. mid-term elections.  The market was not caught off guard, as it had anticipated a divided Congress with a Republican Senate majority and a Democratic House of Representatives majority.  The U.S. economy will continue to be very strong and the Fed will continue to raise rates going forward with a 78% probability for the next hike being in December currently priced in.

The USD is stronger today and a long was taken in the USDJPY risking 8 pips for a potential 32 pips to our daily target at 113.99

By the end of the of the U.K. session, we had not reached our target and closed the trade for a modest return.

An alternative trade today was the EURGBP as the EURUSD moved down and the GBPUSD moved up.  This is a relatively easy trade to get into when opposing direction is seen between the Euro and Sterling crossed against the USD.

There were other good trade setups today and hopefully this will continue with the mid-term election results now history.

Rumours continue regarding a Brexit deal being almost completed, but there is no deal until an accepted solution is agreed upon and we are not there yet.  Be cautious in thinking that the GBPUSD will be headed back to 1.5000 just yet.

Good luck with your trading!

 

Oscillating EURUSD in advance of the Mid-term election results

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Traders have been awaiting the results for the U.S. mid-term elections.  The EURUSD oscillated up and down today in a fairly subdued range.

The pair made a higher lower with a bullish engulfing candle closing back within its Asian range and an entry long was taken risking 10 pips for a potential 65 pips to our daily target at 1.1466.  Price moved higher slowing to retest its Asian high before moving higher.  We tightened our profit stop and were taken out of the trade as price abruptly reversed.

The USD is likely to strengthen if the Republicans maintain a majority in Congress.  Should the Democrats win the majority, the USD is expected to weaken.  Anticipate an active Wednesday in the financial markets.  It will be exciting one way or another.

Good luck with your trading!

Will the EURUSD take out 1.1300 and move lower?

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I am not a EURUSD bull and find it hard to make a case for not shorting the pair when it sets up.  Some concerns that continue to weigh on the euro include who down the road will replace Angela Merkel in Germany, Brexit outcome, Italian budget, and moderate growth and inflation in the euro zone with the first rate hike not before autumn 2019 at the earliest.

Just before the U.S. session got underway today, the pair made a second lower high for the session and an entry short was taken risking 10 pips for a potential 43 pips to the 1.1300 figure.  This seems to be a level where buyers are entering but I’m not expecting it to hold for long.  The idea today was to enter with a small stop loss and keep it tight as price moved down to test the 1.1300 level and locking in profit along the way.

Tomorrow is a holiday for some European countries so trading will be lighter.

Friday is NFP in the U.S. and I will be taking it off.

Good luck with your trading!

 

The USD strength continued today while the EURUSD and GBPUSD continued to move down

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The USD strength continued today and the EURUSD and the GBPUSD both moved down.  We are a week away from the U.S. midterm elections.

As the GBPUSD began to move down in the U.S. session today, a short was taken risking 17 pips for a potential 46 pips to our daily target at 1.2716.  Price moved down and we lowered our stop to protect ourselves in the event of a sudden move upward.  This pair is very vulnerable to any Brexit headlines, so small and tight stop losses are very important.  Due to scheduling conflicts this week, I will be closing trades at the European close at the latest, as was the case today.

The EURUSD looks like it may test its 1.1300 August low and it will be interesting to see how it reacts at this level.

Good luck with your trading!

 

Moderate USD strength as the week begins

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The EURUSD formed a double top today and dropped back into its Asian range in advance of the U.S. open.  Risking 17 pips for a potential 65 pips to our daily target at 1.1334 we entered short.  As price moved down we moved our stop loss to plus 1 as the U.S. market got underway.  As price moved down and long lower wicks formed, we tightened our profit stop further and the trade was closed well short of our target.

There continues to be an increase in fundamental reasons for shorting the euro, but the USD strength has been moderate at best of late.  It was interesting to see the U.S. equity markets move higher to start the trading week, after last week’s declines.  These are cautious times for trading but entry setups are occurring most days even if the returns are less rewarding than usual.

Note:  I won’t be adjusting my charts or trading times to accommodate the U.K. and European Standard time shift this past weekend.  In North America, Daylight Savings time will end on November 4th.  Next week, everything will be back to normal.  This week only, my charts will show the European open and close as opposed to the U.K. open and close.

Good luck with your trading!