Michael Bridgman

A fairly light news week for the USD until Friday.  In the meantime, I’ve had my eye on the USDCAD as oil continues to rise this week to 3 year highs.

On Tuesday, a long setup in the CAD early in the U.S. session overlap requiring a 15 pips stop loss looked attractive especially with a stronger USD.

The trade moved nicely up but retraced taking us out for 25 pips well short of our daily target.

On Wednesday a long setup requiring a stop loss of 15 pips gave us an entry before the U.S. open and with pending oil inventories, we locked in profit before the open and as price moved up.  This trade although it worked seemed odd in that the USD was moderately weak during the session and oil continued to rise again today.  Some profit taking in advance of the oil inventories release took us out of the trade after a nice run upward.

So far this week, it has been more of a case of “trade what you see… not what you think” as some of the usual correlations appear to be detached for the time being.

January tends to bring us surprises.  Be careful.

Good luck with your trading!

The question for many traders at the beginning of January is whether the Euro or the USD is likely to outperform the other.  The Euro has been strong but fundamentally I could make a compelling case for USD strength.  Regardless, the technicals will indicate to us if the Euro uptrend strength will continue to support a weaker economy that is not about to raise interest rates or the stronger economy that is expected to raise interest rates three times in 2018…as priced into the market.

On Tuesday the EURUSD was rising and but then hit an important level and started to reverse.  Although our short trade was a counter-trend one, the risk of 11 pips was not significant and the we caught a down wave during the U.S. session overlap for modest pips before the pair reversed upward.

On Wednesday, the EURGBP set up for a long trade after the pair made a familiar “W” pattern.  Risking 9 pips for a potential 30 pips to daily target made the trade attractive from a reward to risk perspective.

Price moved nicely upward past our daily target and the next candle closed our trade as price came back to our profit stop…before continuing further upward without us.

I have found over the years that January is a very interesting month to trade.  Currency pairs can look much different at the end of the month than how they started the new year.

Good luck with your trading and may you have a very prosperous 2018!

 

After a week of central bank speeches and very little to glean from them, the USD finished modestly stronger on Friday.  The tax reform bill is moving closer to passing next week and this has helped the USD.

As the USD strengthened on Friday a long position was taken in the USDJPY risking 9 pips for a potential 42 pips to our daily target.  Price moved up and we tightened our profit stop until our daily target was reached and closed our trade.

Due to the holiday season kicking in, trading has been thinner this week.  We will be looking for trades up until Wednesday next week.

Good luck with your trading!

The market awaits year end announcements from  central banks this week.  It has fully priced in the anticipated U.S. final rate increase of 2017.  The pending tax reform appears to be having a positive effect on the USD which remains moderately stronger most days.

The EURUSD gave up a key level last week on the daily chart and we will now see how well the 1.1700 figure will hold.  Today as price failed to sustain  above its Asian high and created a second lower high, a short was taken risking 12 pips for a potential 39 pips to our daily target at 1.1736.

Price moved down to its Asian low as the U.S. session got underway, then quickly moved to our daily target at 1.1736 where we exited.

Wednesday and Thursday are looking like busy days for the market with Friday being light on any economic news as we approach the holidays.

Good luck with your trading!

 

The EURUSD moved down further today to a very important level on the daily chart.  With ECB President Draghi speaking tomorrow, we will see how traders respond to his comments and if he reveals anything new.  Currently he has told us that the ECB will be buying 30 billion in bonds per month until September and that may extend – interest rate hikes will be down the road.  In the meantime the USD is remaining moderately strong and today we took a EURUSD short as price rolled over.

Being cautious in advance of the U.S. open… we lowered our profit stop and our trade was closed for a very modest gain.  As price moved down during the U.S./U.K. overlap we could not find another entry point.

On Thursday we have the U.S. employment number first, followed by Mario Draghi speaking at the European close.

Good luck with your trading!

Both the EUR and GBP are very sensitive to Brexit headlines as was clearly evidenced on Monday.  Today after initially moving down early in the U.K. session the EURUSD climbed higher but failed to get above its Asian high, thereby forming a lower high for the day.  A short was taken risking 12 pips for a potential 76 pips to our daily target.

As price moved down in advance of the U.S. open, we locked in profit and progressively moved our profit stop lower.  As price continued downward in the early part of the U.S. session, we continued to lock in profit, particularly after price left a long lower wick at yesterday’s low.  We were subsequently closed as price hit our profit stop on a retracement.

December is shaping up to be active in advance of the holiday season.  The USD continues to hold on to moderate strength since the tax reform was passed.  Let’s hope the rest of the week is as active as the first two days.  Be very careful trading should you feel incline to look for a trade around the Non-farm employment release on Friday.

Good luck with your trading.