Michael Bridgman

A stonger USD continued today lifting the USDJPY with it

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A stronger USD this week and a particularly strong USD today.

After the U.K. session got underway the USDJPY moved down and made a reversal pattern.  A long was taken risking 15 pips for a potential 51 pips to  our daily target at 106.06.

Price moved up to its Asian session high and higher into the U.S. session opening…moving beyond our daily target.  We moved our profit stop higher and price began to pull back taking us out of the trade.

The markets continue to be very active.  Tomorrow will be the last trading day of the month and first quarter.

I will be off on vacation until mid April.  If there is anything urgent, I will have a computer with me but my response time may be slower than usual.

Good luck with your trading!

 

 

An interesting week comes to an end with tariff rhetoric and unstable stock markets and lower USD

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President Trump introduced tariffs for China and now China will impose some tariffs on U.S. goods imported into China.  The ECB seems to have dodged the tariffs from the President for the time being, but this still has the global stock markets rattled and dropping each day.

The USD has been dropping since the interest rate hike on Wednesday with the less than hawkish tone some market participants were expecting from the new Fed Chair Powell.  This coupled with $60B in trade tariffs for Chinese imports into the U.S. and the market is nervous and in a “risk off” sentiment.

The GBP has benefitted this week from progress in Brexit negotiations and now talk of a pending interest rate increase in Britain.  Today we found a long setup for the GBPUSD requiring an 18 pips stop loss for a potential 111 pips to our daily target.

Price rose in advance of the U.S. session open and continued upward but began to run into sellers and our trade was closed at our profit stop well short of our daily target.

Enjoy your weekend and good luck with your trading!

 

 

Interest rates go up and the USD sold off heavily as Fed Powell wasn’t hawkish enough for the market

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Trading is active but even an interest rate hike was not able to prevent the USD from selling off heavily yesterday.  Although new Fed Chair Powell raised the interest rate by 25 basis points and is expected to do so twice more this year, his comments did not lead traders to believe that a fourth rate hike will happen in 2018.  Having already priced in 3 rate hikes for 2018, the USD sold off and traders’ concerns quickly changed from rate hikes and inflation expectations to tariffs against China and a global trade war.

Today the USD gained a bit of strength, but the market is still very risk adverse as was evidenced by the rise in gold and continued stock market sell off.

With WTI lower today combined with a moderately stronger USD, we took advantage of a long setup on the USDCAD… risking 18 pips for a potential 55 pips to our daily target.  Fortunately the trade progressed quickly to our target as there were multiple levels in which the pair could have rested and retested along its way higher.

There are a number of economic releases for Canada on Friday along with the Core Durable Goods for the U.S.  Will the USDCAD be able to close the week above 1.3000 or will sellers enter near that level?  The Bank of Canada has a dovish tone at the moment and is being very cautious as NAFTA is renegotiated.

Good luck with  your trading!

 

A weaker USD on Monday followed by a stronger USD on Tuesday

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The EURUSD has been making a series of lower highs.  Today as it failed to close above its Asian highs, we went short risking 13 pips for a potential 72 pips to our daily target.  Price moved down but bounced a little higher for one candle before testing the Asian low.  Price then continued lower heading into the U.S. session open, before moving down to our daily target where we exited the trade.

On Wednesday the U.S. FED under its new leader – Jerome Powell is expected to raise the interest rate by 25 basis points. Traders will be listening for any wording that may suggest four interest rate hikes this year instead of the three hikes that the market is currently focused on.

Trading may be more subdued in advance of the announcement, but there is U.K. economic news on Wednesday which may lead to some activity in the GBP pairs.

Good luck with your trading!

 

 

Shorting the USDJPY as the market awaits the FOMC rate decision on Wednesday

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The week started off with a weaker USD and a “risk off sentiment”.  The USDJPY moved higher throughout the first half of the U.K. session. As the U.S. trading got underway the pair began to reverse and we entered short risking 12 pips for a potential 64 pips to our daily target at 105.54.

Price initially went sideways testing and retesting its Asian high on a day with a very light economic news agenda.  Price moved lower as the European close approached.  We closed the trade with London still having an hour of trading left due to the time difference here in North America since Daylight Savings went into effect last week.  Fortunately, we will be back to our regular closing time when the U.K. and Europe move their clocks ahead this coming weekend.

On Wednesday the market expects the first rate hike  from Jerome Powell and also for inflation forecasts to remain unchanged.  Any wording to the contrary could create major volatility.  As stock markets and the USD are off to begin the week, keep an eye out for JPY strength if this continues.

Good luck with your trading!

 

The GBPUSD moved lower and continues to make a series of lower highs

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Looking at the daily chart of the GBPUSD, we can see how the pair continues to make a series of lower highs.  It may not be long before price comes down to test last September’s high before moving lower.  There is plenty of downside for the GBP, but on any given day a headline regarding Brexit could potentially move it up in the short term.  Currently my preference is to look for short setups.

As price made a lower high as the U.S. session got underway, a short was taken today risking 18 pips for a potential 63 pips to our daily target at 1.3893.  Price moved down, retested its Asian high…as it tends to do… then descended to our target where we exited the trade.

Trading has been very good this week but I took Wednesday and Thursday off.  With all the turmoil regarding free trade and tariffs, the markets are very active.  As President Trump hires and fires within the White House, we also see the markets reacting.  As I mentioned earlier this week, there is a lot of fundamental reasons to be bullish the USD, but the markets don’t always comply with fundamental analysis.  Continue to trade what you see  and keep your stops tight.

The Trump administration whether you agree with it or not, certainly keeps things very interesting and somewhat entertaining.

The Daylight Savings Time shift for North America has another week to go before Europe and the U.K. adjust their clocks forward.  I won’t be adjusting my charts in the meantime.

Good luck with your trading and enjoy your weekend!