Michael Bridgman

AUDUSD reverses its Asian session move higher

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Australian employment rose 16,000 in January and the AUDUSD moved up during the Asian session.  When London opened, the Asian session high was not broken and price began to fall.  As price continued to move down we went short risking 16 pips for a potential 68 pips to our daily target.

Price slowly moved lower before slowing down just below yesterday’s high.  As long lower wick candles emerged, we tightened our profit stop to just above the previous candle high and we were taken out of the trade.

Although the market is expecting 3 interest rate hikes this year in the U.S. the recent CPI upside surprise has brought into question whether the FED will have to raise interest rates at a faster pace.  Normally one would expect this to be USD positive but the market is very erratic currently and the USD is having a hard time sustaining a bid tone.  The JPY on the other hand is up 6% versus the USD and is the best performing G 10 currency.  The BOJ despite this… says that it is not enough to require intervention.

Be cautious when markets are not making sense and correlations are fading…for the moment.

Good luck with your trading!

Trading the EURUSD higher as the USD loses its upward momentum

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Today was not an easy day to find a trade…unlike last week.

The EURUSD completed a 3 candle reversal and we were willing to risk 12 pips for a potential 48 to our daily target.  At this time of day, I would have been willing to take a 2:1 R/R.  Price climbed higher then ran into a price barrier on our 4hr chart and was not able to get above it.  As price lost momentum at this level, we gave it some wiggle room… tightened our profit stop and the market took us out for a modest gain.

On Wednesday there are a number of major economic news releases for the U.S. followed by crude oil inventories 2 hours later.

Good luck with your trading!

The week of Feb 5th – Feb 9th brought some awesome trades and major technology issues for me

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In the best week of trading this year, I experienced major technology issues and had to use 3 different computers.  I ended up buying a fourth computer and had some issues with it too.  I have not been able to post until now and although I have trades from each day last week, Tuesday’s trade capture is on a third computer but it wasn’t too different from Monday’s trade.  I’m posting 4 trades from 2 different computers and we will call it a week of trading.

The idea last week was to short the GBPUSD as the week started out with Brexit and political issues in the U.K.  On Thursday, BOE Governor Carney was speaking, so I looked elsewhere for a trade to avoid giving back any profits to volatility.  As oil had been declining all week, I found a trade setup long in the USDCAD.  The other four days were all GBPUSD shorts.

I won’t go into my usual description of the reward to risk, profit stop movement, levels in which price will test and retest as the trade progressed etc. because the trades are a little stale now.  It’s a beautiful sunny holiday here and it’s difficult to be inside on a computer.

So here goes the capture uploads for 4 of the 5 trades from last week.

The technology issues last week reminded me of how dependent we are on it and how complicated technology is these days.  One of my external drives also died.  Going forward I will keep things much simpler…which is how I like trading to be.

Good luck with your trading and with your technology!

 

Taking the Kiwi long as USD downtrend continues

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Despite a more hawkish tone from the FOMC meeting yesterday, the USD is mired in a downtrend.  If the current level gives way, it has plenty of room to drop.  All of this may fly in the face of fundamentals…but remains the market’s sentiment of late.

Early in the U.K. session the NZDUSD moved down to its Asian session low where it found support as buyers entered.  Risking 13 pips for a potential 67 pips to our daily target, we entered long, but took the risk out of the trade in advance of the U.S. session opening.

 

Despite a positive ISM Manufacturing PMI release for the U.S. our trade continued to move up toward our target and we exited at the London close.

I will be back next week as I prefer to pass on NFP Fridays for trading.

Good luck with your trading and enjoy your weekend!

 

Shorting the EURGBP post State of the Union pre FOMC

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The majors didn’t offer any high probability trade setups in my opinion today…however the EURGBP set up for a short entry an hour before the U.S. Open.  The EURGBP is worthwhile watching during the Brexit period as it can be fairly easy to trade and active.

I particularly like it when the EURUSD and GBPUSD are diverging which was not the case today.  As evidenced on its daily chart the pair is trending downward.  The .8700 figure may be difficult for it to get through this week as buyers have been appearing at this level recently.

Our trade was taken with a 15 pip stop loss for a potential 54 pips to our daily target .8740.  Price eventually moved down during the U.S. overlap and we closed the trade at the London close where price was sitting at its Asian low.  The British economy is improving and doing quite well overall.  The European economy is doing well too but inflation remains below 2% and Mario Draghi still has time to decide to either taper QE or not.  An interest rate hike is not likely while inflation remains below 2%.

President Trump’s speech last night did little for the USD and the FOMC today is not expected to deliver any surprises at Janet Yellen’s final meeting as chairperson.

If Thursday brings any setups of interest, I will be back tomorrow, otherwise next week as I prefer not to trade on NFP Fridays.

Good luck with your trading!

Trading the USDCAD back down with trend after active Asian session

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The USDCAD is not usually very active during the Asian session,but it made a large countertrend move on Tuesday.  At the beginning of the U.K. session it could not close above its Asian session high and set up for a short back-to-trend.  Three candles into the U.K. session a short is entered risking 15 pips for a potential 75 pips to our daily target at 1.2290.(not shown)

Sometimes in trading you can wait for what seems like hours for a trade to get moving and other times, the market delivers quickly.  Today’s reversal back-to-trend was quick and vertical.

As price moved down, we locked in profit quickly… knowing that vertical moves are not sustainable and looked for any sign of reversal.  Price slowed at its Asian low and retested the level.  We tightened our profit stop even more after 2 long lower wick candles, and it was hit.

Tonight President Trump makes his “State of the Union” address and we expect to hear “America First” and “fair and reciprocal” trade at least once.  This however may not boost the USD as one might expect from protectionist rhetoric.

Hopefully on Wednesday the FED will be able to steer the USD into a more positive territory based on the fundamentals.

I’m back after missing a lot of last week due to the flu.

Good luck with your trading!