Michael Bridgman

It’s been very interesting watching the mighty USD fade in strength recently, despite the fundamentals of a very strong U.S. economy and rising interest rates.  Some critical levels are being taken out and the oversold Euro and Sterling have begun to move up.  Brexit issues, a focus on Italian debt or any number of other issues could bring the Euro and Sterling back down, but in the meantime an appetite for risk has prevailed.

As the U.K. session got underway the EURJPY moved higher then pulled back to retest its Asian session highs, then moved higher… where an entry was taken risking 22 pips for a potential 66 pips to our daily target at 1.3204.  Price continued upward and our target was realized as the U.S. session began.

A second trade was taken today as the USD remained weak and “risk on” remained as evidenced by global equity markets. This helped push the USDJPY higher.  Risking 13 pips for a potential 40 pips to our daily target an entry long was taken.  Price moved up but when a long upper wick appeared, we moved our profit stop up and the next candle closed the trade.  One of my students rode it right to the daily target and got an extra 10 pips with an identical entry. ( Congratulations Juerg!!!)

On Wednesday we took the AUDUSD long during the early part of the U.S. session risking 10 pips for a potential 25 pips to our daily target at .7271

As price moved higher we placed our profit stop at plus one pip, which held after a minor pullback for 2 candles… before price moved higher into the U.K. close.

The EURUSD, EURJPY and GBPUSD have all moved higher above technically significant levels on the daily charts.  Will price retest these levels or will price continue higher?  We will have to see how long this “risk on” appetite continues.  Keep an eye on the 10 year yield, equity markets and USD index for some clues.  Keep your stop losses tight and lock in your profits as the market moves in your favour.  The potential for high volatility exists  as the battle between USD bulls and bears heats up.  It won’t take much to take the wind out of the sails of the EUR and GBP – which is why we trade on technicals but pay close attention to the fundamentals.

This summer President Trump said that he wants a weaker USD.  He also made it clear again today that he wants the OPEC countries to lower the price of oil. .

I will be away tomorrow but back next week.

Good luck with your trading!

 

 

 

 

 

Mondays tend to be difficult days to trade.  On rare occasion they can be rewarding, but they tend not to be revealing of the coming week’s bias.  Lately, by being very selective, I have found fewer trades each week – partly because I’m a USD bull.  The market of late has not entirely agreed with me and it’s not uncommon to see 3 bearish days in any given week for the USD.  As the market has started to shift a bit away from USD strength, I’m prepared to very selectively do the same… as it’s never a good idea to fight the market.

Today was a day of USD weakness, but not one of “risk off”.  There was a fairly uniform move against the USD today and the EURJPY was preferable to me over the EURUSD because it had pulled back after breaking above its Asian range.  The EURJPY offered an entry with a small stop loss of 16 pips for a potential 72 pips to our daily target at 131.24.  Price moved up into the U.S. open and without any U.S. economic news releases, price moved higher, but was unable to climb above the 131.oo figure.

The EURJPY tends to be a  very active pair and not nearly as erratic in its moves now, as it has been historically.  It certainly is worth a look.

Mario Draghi will be talking twice this week, so trade accordingly.  Any positive news regarding Brexit can cause large up moves for the GBP and EUR. The trade tariff threats continue between the U.S. and China… which some days the market seems more focused on than other days.  Australia and Japan both have monetary policy statements this week.  It will be interesting to see if Britain can continue its recent positive economic progress.

Good luck with your trading!

The soft USD this week allowed the EURUSD to move up to a technically significant level for traders on the daily chart. With price failing to stay above it, coupled with a stronger USD on Friday, we were able to find a short… risking 12 pips for a potential 78 pips to our daily target at 1.1633.  Price moved down and drifted sideways during the first half of the U.K, session – testing Thursday’s high.

We chose to keep our stop loss very tight and as price moved down to its Asian session low just in advance of the U.S. open, we tightened our profit stop further.  Price moved higher at the open and closed our trade before descending significantly lower after the news.

It wasn’t the easiest week to find trades, but we don’t need to find them everyday.  Patience and discipline rewards traders over time.

Enjoy your weekend!

 

There were a number of good trade setups today.  The EURUSD and EURJPY looked very similar but the EURJPY has been very active lately and today as it rolled over, a short was taken risking 20 pips for a potential 100 pips to our daily target at 1.2864.

When a pair does its daily range or fairly close to it during the Asian session, it frequently will be reversed by the U.K. traders and a very familiar pattern forms.  Although this trade didn’t make it to our daily target, it did come right back down to its Asian session low.

The euro and the sterling are starting to have big moves to the upside on any positive Brexit resolution announcements.  If trading either, be sure to keep your profit stops tight, as we have seen some very sudden upside moves for both.

Trade tariff talk between the U.S. and China as well as between the U.S. and Canada continues this week.  Mario Draghi will be talking on Thursday which may result in further volatility for the euro.

Good luck with your trading!

 

The market remains concerned regarding the impact of the tariffs between the U.S. and the China.  There is also a concern about whether Canada and the U.S. will be able to come to agreement on NAFTA.  Although headlines may indicate different deadlines for this to happen… as long as it does happen by month end or sooner, we can put this one behind us.  Otherwise the CAD is in for some selling as the market believes that not only will NAFTA pass but also the Bank of Canada is about to raise interest rates again. Emerging markets are suffering and this too is reason for the market to seek safety and avoid risk.  It is not a surprise with all the uncertainty and focus this week that the USD has been soft.

Today with equity markets all in the red and the 10 year yield also dropping, we looked to short the USDJPY and the EURJPY.  The latter turned out to be very worthwhile.  Risking 20 pips for a potential 74 pips, we entered short after a familiar reversal setup with a target of 128.71.  Price made it’s way down to its Asian session low and moved a little higher causing us to move our stop loss down to plus one.  Price then plummeted through its Asian session low, came back to retest it, and moved down quickly to our target where we exited.

This is the only day of trading for me this week.  Monday was a holiday, Tuesday there were no setups with an appropriate risk reward ratio, Wednesday my modem died before the U.K session.  I still prefer not to trade on NFP Fridays.

Good luck tomorrow and enjoy your weekend!

 

 

 

The trade tariff rhetoric has caught the market’s attention, as anticipated – going into the holiday long weekend for North America.  Equity markets were down today and money was flowing to safety.

The EURUSD made a triple top early in the U.K. session and began to move down.  A short was taken risking 13 pips for a potential 70 pips to our daily target at 1.1607.  Price moved down to its Asian session low, retested the level and moved lower to close below yesterday’s low, but had difficulty breaking some important technical levels.  We tightened our profit stop and the trade was closed.  We missed the final wave down but we were spared a retracement in advance of it.

It’s unclear how the NAFTA talks will conclude today.  President Trump is talking tariffs versus Europe again.  Further trade tariffs with China next week may keep the market seeking safety while this gets worked out.  September will not doubt be an exciting month as volumes pick up after the summer and we get closer the mid-term elections of November.

Good luck with your trading and enjoy your weekend!