Michael Bridgman

EURUSD trades this week were easy to come by

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As mentioned a couple of week’s ago, our bias is to trade the EURUSD short… with the trend.  It broke a very important technical level and we will continue to evaluate it daily for entry setups.  On Wednesday after the U.K. open, the pair failed to stay above its Asian session high and an entry short was taken risking 14 pips for a potential 76 pips to our daily target.  Price moved lower and bounced just above our target at 1.1765 leaving a long lower wick.  We tightened our profit stop and price moved higher just before the U.S. open closing our trade.

On Thursday, the EURUSD tested its Asian session low at the U.K. open and moved higher.  After making a third lower high for the day, we found an entry short (with trend) risking 17 pips for a potential 69 pips to our daily target.  Price moved lower then briefly retraced… making a fourth lower high for the day…moved lower again and found buyers just above its Asian session low.  It then pulled back for 2 candles leaving a long upper wick before plunging lower.  We moved our profit stop down to allow for a retest of the Asian session low.  A long lower wick indicated that buyers were entering and we closed our trade on the following candle…giving back more than we wanted to of the move.

On Friday the EURUSD began to move very similarly to Wednesday.  It poked above its Asian session high and moved lower.  When price moved down and closed bearishly near its low, we entered short (with trend) risking 18 pips for a potential 67 pips to our daily target at 1.1738.  Price moved lower, then plunged through its Asian session low testing the previous day’s low.  We moved our profit stop down to allow for a retest of the Asian session low.  From there price went sideways… before finally closing below yesterday’s low.  We moved our profit stop lower to allow for a retest and we were closed the following candle.

This has been a great week to trade.   Looking forward to what next week brings us.

Enjoy your weekend!

Finally a fun day of trading

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The GBPUSD has been holding on to the technically significant  1.3550 area for over a week.  With a stronger USD today coupled with the US 10 yr yield back above 3%… we saw a uniform move across the majors.

We entered the GBPUSD short risking 15 pips for a potential 84 pips to our daily target.  The headlines about the E.U. stating that “the clock was ticking”… referring to the poor Brexit progress helped the move.

If the USD can remain strong and the US 10 yr yield stays above 3% …I expect the markets to be active as re-balancing takes place.

Good luck with your trading!

The USD is currently on its back foot but this too shall pass

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Trading has been interesting this week.  With President Trump’s announcement regarding Iran, the USD has temporarily lost its momentum upward and crude oil (WTI) is above $70 for the time being.  Israel is aggressively defending itself against attacks, which creates uncertainty in the Middle East.  This can lead to higher oil prices and a flight to safety.  We haven’t seen this yet in the equity markets, but the US 10 yr yield remains below 3% and gold is catching a bid…at least for now.

On Wednesday the markets reaction to the President’s speech created some countertrend moves in the majors.  We chose the AUDUSD as the stop loss was 12 pips for a potential 56 pips to our daily target at .7478.  As this was a countertrend trade, we moved our stop loss upward quickly to take the risk out of the trade and we exited the trade early in the U.S. session at the first sign of a pullback.

On Thursday, the Bank of England which has been susceptible to credibility issues of late, released its inflation report and monetary policy summary. If you have been watching this pair, it has been sitting near a critical level as the market awaited this news.  Essentially the market wants to hear from the U.K. that there will be a pending interest rate hike soon… and it’s not hearing it.  This caused a sell off reaction, a pullback, followed by continued selling as the critical level gave way with no closes above it.  Despite USD weakness today the GBPUSD fell dramatically.

With both the GBPUSD and the EURUSD, I’m looking for short setups as there is plenty of room for both pairs to fall further.

Keep an eye on geopolitics, USD strength/weakness, along with the overall market tolerance for risk.

Good luck with your trading!

Shorting the EURUSD

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The EURUSD is the easiest of the major pairs to trade currently.  As mentioned last week, price traded below a technically important level which opened the door for further downside selling.  Geopolitical events can cause sudden unexpected back and  forth moves in the financial markets and with that said, the EURUSD looks like it may continue lower.

Today after the U.K. open, price tested its Asian low, bounced upward and then broke clearly lower with trend.  A short was taken risking 15 pips for a potential 49 pips to our daily target.  Price moved downward through yesterday’s low, then continued lower.  We tightened our profit stop in advance of the U.S. open and were quickly closed by the market…missing out on the final wave to the downside for today.

There will be some European bank holidays on Thursday, as well as the Bank of England monetary policy announcements.

On the geopolitical side, keep an eye on USD strength, gold and the bond market for guidance.

Good luck with your trading!

 

EURUSD and USDCAD trades for this week

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On Wednesday, the EURUSD moved up to begin the U.K. session but could not stay above a very important technical level.  It then moved back down and traded sideways going into the U.S. open.

A bearish engulfing candle set up our short entry…risking 15 pips for a potential 57 pips to our daily target at 1.1941.  Price moved down to its Asian low then continued downward through the previous day’s low.  We moved our profit stop down to protect this level, as long lower wicks were forming.  Price then made a new low for the day before double-bottoming and bouncing us out of the trade – well in advance of the pending FOMC meeting.

On Thursday, after the economic news releases the USDCAD moved down to test its Asian low, and bounced with a bullish engulfing candle.  A long was taken risking 17 pips for a potential 34 pips to our daily target at 1.2892.  Price moved up quickly closing above our target.  We protected this level by moving our profit stop to it.  When price dipped down on the next candle our trade was closed.

As expected the FED did not raise rates yesterday.  The USD was weaker today as trade concerns between the U.S. and China heat up.

Last week trading was very good with the exception of Friday.  We will take tomorrow off as we do on Non Farm Employment release days each month.

Good luck with your trading and enjoy your weekend.

 

 

 

Trading the AUDUSD and EURUSD in a quiet week

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I’m back from holidays and could not find any trade setups that I liked until Thursday.  The market appears to have cooled off with most of the pairs trading tighter ranges than when I left at the end of March.

On Thursday a trading pattern set up on the AUDUSD.  This has been a favourite pattern for trading the Aussie, but it’s not as common as a few years back.  The AUDUSD which has been very subdued in its trading lately moved up to do its daily range during the Asian session before making a lower high as the UK session got underway.

As  price rolled over, a short was taken risking 12 pips for a potential 38 pips to our daily target at .7763 .  Price went sideways going into the U.S. session open and then began to drop.  We were hoping to get to its Asian low, but price dropped abruptly as it neared our target.  As the UK session ended, we closed the trade.

On Friday, the USD continued to strengthen buoyed by U.S. 10 year yields rising over 2.90% coupled with a widening spread difference between German and U.S. bond yields.

As the EUR began to move lower after making a lower high, we were able to take advantage… risking 9 pips for a potential 38 pips to our daily target at 1.2289.  Price moved below yesterday’s low but began to retrace before the U.S. open and our profit stop closed the trade.

The pair made a 3 drives pattern by the time the U.K. session ended but we only participated in the second drive lower.

Enjoy your weekend and good luck with your trading!