Michael Bridgman

I found it to be rather curious that with traders predicting a rate hike by the U.S. Federal Reserve yesterday with a near 98% certainty, the USD was very weak going into the FOMC announcement.  The sentiment reversed after the news and the USD is stronger since… versus the majors.

We found an opportunity to go long the USDJPY in advance of the U.S. session and were rewarded.  The key to the trade was in moving up the profit stop frequently to allow our profits to be locked in without being rattled out of the trade.

Once price moved up and closed bullishly above its Asian session high, we entered with a tight stop loss allowing for price to retest the level.  The next area to get through was the 110.00 big figure and then our target of 110.25 and yesterday’s high.  This pair tends to move well during the U.S. session and once again traders pushed it higher toward the London close… where we exited.

Good luck with your trading!

After a series of lower highs, the EURGBP set up for a short as did the EURJPY at the same time…confirming euro weakness once again above the .8850 level.  Risking 20 pips for a potential 72 to our daily target which was .8785 – a short entry was taken.  Price was slow to move down but eventually broke to the downside.  Price made a nice wave to the downside before long lower wicks formed – meaning that buyers were entering and our profit stop was tightened and hit.

Price went sideways during the first 3 hours of the U.S. session before breaking once again to the downside where a second short entry was taken.  At the close of the U.K. session price was having difficulty breaking the .8785 area once again, nor had it tested yesterday’s low and we closed the trade.

The market has priced in a rate hike tomorrow from the Fed.  Traders will be listening closely for any suggestion that a September rate hike (currently a 28% probability) is on the table.  A third rate hike this year is currently a 48%-55% probability.  Before the FOMC statement tomorrow there are CPI and Core Retail economic releases to add some volatility to the majors.

Good luck with your trading!

Prime Minister Theresa May of Britain has her hands full after a less than stellar election result.  The GBP remains under pressure and formal Brexit talks will begin next week with the E.U.

Today the EURGBP moved up above its Asian highs then pulled back…finding buyers again at its Asian high.  An entry long was taken with a stop loss of 10 pips for a potential 58 pips to our daily target.  Price climbed higher through the session and into the U.S. session until it failed to close above yesterday’s high.  Tightening our profit stop throughout the move, we were closed as price moved down off its high hitting our profit stop.

The EURGBP remains worthy of attention during the Brexit negotiations.  It’s a very tradeable pair and tends not to be too volatile.

This will be an active week as there are numerous central bank announcements.  The FOMC decision on Wednesday will follow CPI and Retail sales releases.

Good luck with your trading!

The EUR has been trending upward lately, but had a sharp sell-off beginning 3 hours into the U.K. session.  With the trend being up… a long is found after the sell-off as price puts in a bottom beneath our downside target.  The long lower wicks indicate where the buyers are entering.  As price moved up we risked 18 pips for a potential 61 pips to our upside target.

With price selling off in the 1.1283 area the previous 3 days, we were quick to exit at our target of 1.1281 just in advance of the sellers entering again.

Tomorrow the ECB Press Conference will be watched closely for any hint that the EUR may have gotten ahead of itself.  With the UK Election also tomorrow and formal Brexit talks beginning on the 19th, expect both the EUR and GBP to be active.  The EURGBP is also well worth watching.

Good luck with your trading!

The GBP’s recent uptrend may be under a little pressure as the uncertainty of the U.K. election outcome for Prime Minister May’s government June 8th and the formal Brexit talks with the E.U. beginning on June 19th.  Despite USD weakness, the GBP began to sell off today early in the U.K. session.

Price rose during the Asian session but could not close above yesterday’s high.  As price rose early in the U.K. session it was again rejected at yesterday’s high and a short was taken.  Price moved down but had some significant levels to get through as it has been trending upward lately.  We were very cognizant of these levels from the larger charts and cautiously chose to protect our profits at the 1.2900 figure.  Once the U.S. session got underway price dropped further… without us… but recovered making higher lows to close above its Asian session low.

A close below 1.2865 could open the door for a continued move of approximately 100 pips.

Good luck with your trading!

WTI oil continues to stay below $50 barrel and moved lower for a second day in a row.  Despite a bullish GDP release for Canada and a weaker USD, the USDCAD was able to move above 1.3500 today in the U.S. session overlap.

After a third higher low for the session, an entry long was taken with a 17 pip stop loss for a potential 78 pips to our daily target.  As price moved above its Asian high, we allowed room for a retest of that level as we did with yesterday’s high subsequently.  Price continued higher and our trade was closed as our daily target was reached… just before the European close.

A weaker USD today still outperformed versus the commodity currencies.  The AUD remains vulnerable as iron ore prices are back down to last November’s levels.

Politics not economics are weighing on USD strength along with lower treasury yields.  The Euro and GBP are also vulnerable to political perception.

Tomorrow will be our last trading day this week as we prefer to take  NFP Fridays off.

Good luck with your trading!