Forex Tips

As the U.K. session got underway the GBPUSD moved lower to test its Asian session low, then broke above its Asian session high leaving a bearish doji candle. Price pulled back to test yesterday’s high before reversing higher leaving a bullish 3 candle reversal pattern.

An entry long was taken risking 15 pips for a potential 78 pips to our daily target at 1.1994. Price moved higher going into the U.S. open as the USD continued to weaken. As price approached our target, it accelerated and closed well above the 1.2000 big figure… half an hour before BOE MPC Pill was to speak. The market appeared to take his mention of a potential 50 bp U.K. interest rate hike in December as further reason to be long the GBP and it surged over 40 pips higher. The following candle was a bearish doji and we used it to tighten our profit stop which closed the trade on the subsequent candle.

If the DXY continues to move lower, the next major technical level of support is approximately 105.20.

Happy Thanksgiving holiday to Americans.

Good luck with your trading!

First we had Federal Reserve Vice Chair Lael Brainard saying the central bank should soon moderate the size of interest rate hikes, signaling she is favour of half-point increases as early as December.

Today we had PPI data which came in weaker than expected causing the USD to pop to the downside and EURUSD to pop up over 80 pips and the GBPUSD to pop up over 140 pips. Both pairs exceeded our daily targets, so we waited two candles for confirmation of a pullback.

An entry short was taken on the EURUSD risking 25 pips initially. Price continued lower testing its Asian session high but fell short of penetrating yesterday’s high, hitting our profit stop to close the trade.

With the apparent effect now of the interest rate hikes dampening U.S. inflation, money is moving back into equities and the USD continues to weaken. The 104.90 level area for the DXY remains technically very significant.

Good luck with your trading!

It was a very light economic news calendar today. The DXY moved lower again for a third day in a row and the USDJPY set up for a trade before the other majors today.

The pair had moved lower after the U.K. traders began their day, then made a small retracement in advance of the U.S. session overlap. As the pair began to move lower after the U.S. open, a short was taken risking 22 pips for a potential 108 pips to our daily target at 145.08.

A subsequent short was also taken on the USDCAD (not shown) and this trade was left open after the U.K. close for one candle… which resulted in giving back about 10 pips as the pair retested the 1.3400 level.

Who knows how long it will take to tally the votes for the U.S. midterm elections today… but the results and speculation will be interesting.

Good luck with your trading!

A fairly tight trading range before the U.S. session, then a uniform move across the majors as the DXY moved lower and lower.

A long was taken in the EURUSD risking 20 pips for a potential 79 pips to our daily target at .9953.

The move was vertical so we tightened our profit stop with each candle and kept an eye on the move of the other majors. Price moved through our target and we tightened our profit stop even more, and it was hit for a few extra pips.

.9900 which had acted as resistance yesterday may get retested as support over the next trading day as may par on further USD weakness.

Wednesday brings the closely watched U.S. New Home Sales release and the Bank of Canada Interest Rate Decision… which is expected to be another large increase.

Good luck with your trading!

The Asian session saw the EURUSD move lower and as the U.K. traders began their day, breakout shorts were tricked, and the pair briefly moved higher taking out stops. A second test of the Asian low found some buyers for one candle which was followed by a bearish engulfing candle and a close beneath the Asian session lows. A short was taken risking 18 pips for a potential 53 pips to our daily target at .9763.

Price tested yesterday’s low for an hour after our entry, before descending to our target where the trade was closed.

Thursday will be an eventful day on the economic calendar.

Good luck with your trading!

The GBP pairs have been very active since PM Liz Truss came to power. Last week she fired her Chancellor of the Exchequer. On Friday, the Bank of England’s emergency bond buying program ended. The newly appointed Chancellor of the Exchequer, Jeremy Hunt is trying to prevent further damage to the GBP. The Conservative Party is scrambling to determine what is next for PM Truss, who has severely damaged the strength of the country’s currency and investor confidence.

Needless to say, the GBPUSD has been very volatile of late and today with a very weak USD, to begin the week, the pair made a series of higher lows and a long was taken early in the U.S. session overlap – risking 28 pips for a potential 88 pips to our daily target at 1.1401.

The pair moved higher on this light economic release trading day. The USD continued to weaken through the session and the major pairs, with the exception of the JPY, traded higher against it.

We protected our profits as price continued higher – especially as price moved above our daily target. The first pullback from above our target closed the trade. Keeping stop losses and profit stops tight on countertrend trades is very important as they can end abruptly. This is especially true of the higher octane GBPJPY.

Good luck with your trading!