Michael Bridgman

The EUR appears to be sensitive to the polls indicating which candidate is ahead in the pending French election lead up.   If Le Pen appears to have greater support than Macron and Fillon, it will not bode well for the single currency.  Traders will be awaiting the ECB Press conference on Thursday and anticipating a further dovish bias tone from Mario Draghi.

After the U.K. traders began today, the EUR attempt to climb above its Asian session high was quickly thwarted setting up a reversal pattern coupled with a third lower high.  A short is taken with a 9 pip stop loss for a potential 69 pips to our Target of 1.0525 today.  Price moved down taking out both yesterday’s and the Asian session lows before forming a doji looking candle with a long lower wick.  We tightened our profit stop to the high of the doji candle and the subsequent candle closed our trade.

The GBP remains weak with the House of Lords influence possibly delaying the triggering of Article 50 for the moment, and focus tomorrow will be on the U.K. Budget.

Good luck with your trading!

 

What a difference a week makes in changing the sentiment of the markets.

The big question today for traders is Janet Yellen’s wording regarding a U.S. rate hike on March 15th.  Even dovish Fed members have been sounding hawkish this week, so the market is pricing in a rate hike.  If Yellen’s wording is not consistent with that forecast then the USD will weaken.  A lot can happen between now and March 15th so it is never a given until hit happens.

Looking at the majors, the charts are showing USD strength.  The AUD and NZD have been coming off their highs this week and with a stronger USD, and the 10 year yield reaching the 2.500 level, I am looking for short setups.  The Kiwi moved up into the U.S. Open but quickly topped out and reversed.  A short is taken risking 15 pips for a potential 34 pips to our Target.  Price moved down and closed below its Asian low and we allow for it to retest the level moving our stop loss down.  We now have no risk in the trade.  We hoped that price would move down to the .7000 figure but it did not and our profit stop is hit.

Next week looks like it will be exciting with lots of economic news throughout the week and a very closely watched  Non-Farm Employment number on Friday.  Next weekend North America moves to Daylight Savings Time – moving clocks ahead.

Good luck with your trading and enjoy your weekend!

With renewed USD strength and a “risk on” sentiment evidenced in the equity markets and the U.S. 10 year yield, I had my eye on the USDJPY for a long setup.  Price has moved up this week and now surpassed a very significant level on the Weekly chart.  As the U.K. session got underway, price tested and retested its Asian high…forming a familiar “W” pattern.  When price broke bullishly above, a long was taken with a stop loss 10 pips lower and a Target price of 114.75 today.

Price appeared to have difficulty climbing higher and we moved out stop loss up to plus 3 pips and waited.  The pair moved sluggishly higher in the U.S. session before reversing to close the trade for moderate gains.  My bias continues to be bullish for the pair as we watch the market price in a U.S. interest rate hike this month.  As long as the U.S. 10 yr yield continues to increase, gold continues to move down, U.S. equities move higher in the short term and Fed members continue to sound hawkish, my preference will be to look for long setups.

Good luck with your trading!

A conciliatory sounding speech by President Trump to Congress and hawkish sounding Fed members may be the impetus to a stronger USD going forward.  We will know more on Friday, but in the meantime it appears that a rate hike this month is back on – in the minds of the majority of traders.

The GBP closed Tuesday below a technically important level.  The Manufacturing PMI missed today and the GBP weakened.  After the disappointing number and with a close below yesterday’s low… a short is taken.

Price descended but it took an hour after our entry.  It then moved right through its Asian low without retesting the level…then moved down to test the 1.2300 figure where it bounced briefly.  With Construction PMI due out tomorrow, another miss could push the GBP down to test the 1.2200 figure.

The Dow moved up almost 1.5% today, Gold has backed off considerably from its high on Monday and the U.S. 10 year yield is up well over 4% today. I will be looking for USD long setups in the majors.

Good luck with your trading!

We will have to wait for the markets to interpret President Trumps speech before Congress tonight to see whether the USD can get some long awaited strength.  A number of the majors are at important technical levels so large moves may follow.  The question is whether those moves will be up or down?  We also await Janet Yellen on Friday for any clues as to an imminent U.S. rate hike.

The USDJPY moved down during the Asian session and ran into sellers as it attempted to rise early in the UK session.  As it appeared to roll over… a short was taken risking 12 pips for a potential 41 to our Target.  Price broke through its Asian low, retested the level and moved lower again going back and forth in advance of the U.S. open.  After price tested the 112.00 figure and bounced, our profit stop was hit.

It will be interesting to see how the pair reacts tomorrow after the President Trump’s speech.  If price takes out 111.85 and 111.55 – it appears technically like it has potential for a large drop.  If it gets back above 113.00 – I will be looking for long setups.

Yellen will be speaking an hour after the U.K. close on Friday…so there is still time for some large moves between the president’s speech and her’s.

Good luck with your trading!

It’s not surprising to see equity markets take some profits on a Friday.  With USD strength rather muted this week, and a “risk off ” sentiment going into the weekend, the USDJPY looked like a good short candidate.  Price had moved down through 113.00 yesterday and made a series of 3 lower highs durning the Asian session.  Would we see 112.00 today?

As the U.K. session got underway, price made no attempt to rise… it  moved sideways for the first hour of trading hovering just above its Asian lows. The pair then broke to the downside and an entry short was taken.  This allowed for an 18 pip stop loss and a potential 36 pips to our Target.  With ranges having been subdued this week as traders awaited the FOMC statement on Wednesday, there has been potential for large moves since.

When price moved down further, we removed the risk from the trade and waited to see if price would continue to our Target.  As price continued lower, we began to lock in profit as we approached the U.S. overlap part of the session.  Price continued a bit lower as the U.S. session got underway before reversing upward in advance of President Trump’s speech.

I read an interesting note yesterday that insiders were selling 5.5 times as many shares as they are currently buying.  It’s no surprise that with a 15% jump since the U.S election that some profits are being taken.   Be careful out there.

The big economic picture at the moment remains as clear as mud.  Trade what you see.

Enjoy your weekend!