Michael Bridgman

Many have been anticipating a stronger USD as President Trump’s policies become known.  The DOW hit an historical high yesterday and closed above 20,000 for the first time.  As the trading got underway in London today, the GBP rose to its Asian highs testing breakout traders.  After leaving 2 candles with long upper wicks, price dropped to test its Asian low before moving down further.  Price made a small wave up to test the Asian low again and left 2 candles with long upper wicks, followed by a bearish candle.

An entry short is taken with a 20 pip stop loss for a potential 65 pips to our target at 1.2541.  Price moved down but lower wicks began forming and we tightened our profit stop recognizing that some buyers were entering.  Our profit stop was hit taking us out of the trade but we managed to catch a nice portion of the second wave down.  The first wave happened too quickly for us to find an entry.

U.K. economic releases continue to indicate that their economy is doing fairly well.  The GBP has been beaten down due to Brexit fears of doom and gloom. It wouldn’t surprise me to see the sterling strengthen going forward.  This may be easier to trade in the EURGBP cross than the GBPUSD.

Good luck with your trading!

The EUR has had difficulty staying above the 1.0765 area today.  After it ran into sellers leaving two long wicky candles,  a short is taken requiring only a 13 pip stop loss for a potential 65 pips to our Target of 1.0691.

Price didn’t drop as far as I would have liked but it dropped quickly, had a small bounce at the Asian high, and descended further, before hitting our profit stop and the USD weakness continued.  Although the EUR has been moving up this year so far, it may not take much to send it back toward last year’s lows.  Once the market begins to focus on the pending elections in Europe this year, I think the selling will resume.  It’s had a very good month to start the year.

Trading continues to be tricky…be patient and good luck!

It’s been awhile since I posted a trade and the market has not been too revealing of its direction…yet.  The first 2 weeks of January had low liquidity with many traders being on holidays.  The third week of the New Year was potentially very volatile as there was major economic news daily and the inauguration of President Trump.

Yesterday the USD was quite weak, but I’m not anticipating that to last long.  I’ve been awaiting confirmation of a strong USD trend to emerge, but haven’t seen it yet.  The markets are trying to determine what effect President Trump’s  policies will have going forward.  When that becomes a little clearer, the markets will be more revealing of direction.  In the meantime, it’s always a good idea to follow your disciplined trading plan and trade what you see – not what you read or necessarily think.  It will be a fascinating year and we live in very interesting times.

The U.S. is Canada’s largest trading partner and business is appearing to be as usual at the moment with the new president – which is very bullish for Canada. With a  move up in oil today, and an optimistic outlook for trade between Canada  and the U.S., the USD began to move down against the CAD as the U.S trading session got underway – breaking the range of its previous 2 hours.  A short was taken with a 28 pip stop loss for a potential 110 pips to our target.

The trade moved quickly as price descended to test yesterday’s low, the Asian session low, and moved to our target – where we exited and the move stalled until after the London session ended.

Unless oil continues to move up, the 1.3100 level is likely to prove difficult to get through.  If WTI moves higher toward $55 barrel and the USD weakness continues, then we may see the 1.3000 level tested.   At the moment 1.3080 looks like a good support level.

Good luck with your trading!

The GBP continues to trend downward as we await the High Court decision regarding the invoking of Article 50 for Brexit.  In the meantime, if buyers don’t emerge in the 1.2300 area, there is room for the pair to move down toward 1.2100 support.  The GBP appears to be oversold, but that doesn’t mean it can’t become even more oversold.

We were hoping to get a nice move today as it began to sell off…especially after missing out on yesterday’s move.  We entered short today risking 15 pips for a potential 97 pips to our Target of 1.2277.  After we entered, price moved through its Asian session low and down through yesterday’s low. After leaving a long lower wick, we tightened our profit stop and were closed for modest gains as price moved higher to retest yesterday’s low.

Trading volumes are lower this week as we approach the holidays.  Keep your stops tight as a large order flow can have a more dramatic effect on price movement this week with liquidity being lower.

Good luck with your trading!

 

The currency pairs are trending nicely once again since the Fed rate hike on Wednesday this week.  Today wanting to take advantage of the trending AUDUSD, we found a short setup requiring a risk of 19 pips for a potential 62 pips to our Target.

After a bearish engulfing candle, we went short and waited for price to break below its Asian session low and yesterday’s low.  In advance of the U.S. session getting underway, we moved our stop loss to plus 1, then continued to lock in profit as price continued downward.  To our surprise, price plunged right through our Target and closed bearishly below it.  Price then attempted to go lower but found buyers setting up the second candle of a three candle reversal.  We exited for bonus pips on a rare day of the market being exceptionally generous.

This pair has been an institutional short lately at .7500 – should it get back up there on a retracement, keep your eyes open as to which direction it goes from there.

As market liquidity is declining going into the holidays, be careful of sudden moves caused by large year end orders.  Keep your stops tight and trade with the trend.

Good luck with your trading and enjoy your weekend!

 

It was a quiet week leading up to the FOMC rate increase… that had already been priced into the market.  The charts were looking a little ambiguous  prior to the announcement but now with the USDX strength, the pairs are aligning nicely for trending moves.

The EUR moved up briefly in the early part of the U.K. session before rolling over to close below yesterday’s low.  A short is taken with a 23 pip stop loss for a potential 90 pips to our Target.  Price moved down and paused just above its Asian low before dropping 47 pips in one 15 minute candle.  We cautiously protected some of the move and continued to do so as price extended further.  When price began to retrace we are closed at our profit stop where our Target 1 would lie.

The EUR was the easiest of the majors to read today and required the smallest SL.  The JPY chart is looking very nice too.    With the interest rate increase finally behind us, and the markets appearing to be buying into “Trumponomics” … next year looks like it’s shaping up to be an exciting year for trading.  The question for traders is whether we will see 2 or 3 interest rate increases in the U.S. in 2017?  According to Bloomberg’s Fed probability calculator, chances of a third hike in 2017 currently lies at 48% – up 9% since Tuesday.

Good luck with your trading!