Archives for June 2018

On Thursday, E.C.B. President Draghi stated that the Q.E. program will end at the end of December this year (no surprise there).  The surprise for the market was that he stated there would not be any interest rate increase through the summer of 2019…and the EURUSD plummeted.  This came the day following the FOMC hawkish statement that a fourth interest hike this year is on the table.

Avoiding the potential volatility from the Draghi speech, I chose to focus on an AUDUSD short… risking 9 pips for a potential 36 pips to our daily target at .7522.

The BOJ disappointed today, but the market is very focused on the trade tariffs with China.  The U.S. economy is very strong, but trade wars especially on the scale rumoured for China will not help it.  I read a report today that Treasury Secretary Mnuchin has warned President Trump that the tariffs could have dire consequences. The good news is that both countries have some time to reconsider and negotiate before the implementation date of July 6th.

It’s pretty exciting out there.  Always make your trading decisions on what the market is doing and showing you – not the ever-changing headlines.  It’s very useful to know the market’s sentiment, but trade what you see…not what you think.  Don’t be concerned about stepping aside when the signals are less clear and coming back later.

Enjoy your weekend!

 

 

On Wednesday, well before the FOMC rate announcement, a short setup was found on the USDJPY.

After the Summit in Singapore yesterday went well, the market shifted its focus back to trade tariffs.  With a pending announcement from Fed chair  Powell, and the USD not showing any strength, a short USDJPY trade had potential.  We risked 11 pips for a potential 55 pips to our daily target at 110.06.  Price had failed to close above its Asian high and we were hoping to get through yesterday’s high and the Asian low on the way to our target.  As price moved down, it bounced at its Asian low…leaving a long lower wick.  We tightened our profit stop and our trade was subsequently closed as buyers entered in this area.

On Thursday the market will be listening closely to ECB President Mario Draghi… expecting to hear when the bond purchasing by the ECB will end.  The market is trying to determine how soon Europe will be able to reduce its asset purchasing and move toward normalization.  Any surprising signs of this being imminent will help the EUR appreciate.

On Friday the BOJ statement may be anti-climatic and in the meantime, 110.00 remains telling for the USDJPY.

Good luck with your trading!

As the U.S. session got underway on Thursday, the AUDUSD began to roll over and a short was taken risking 10 pips for a potential 44 pips to our daily target at .7605.  The trade inched lower slowly and we exited at the U.K. close.

Trade tariff implications remain the subject of concern and discussion this week.  The G7 meetings will be interesting, but may not be overly productive in changing President Trump’s perspective.

This week did not have a lot of economic news drivers for the market…the calm before the storm.  Next week is going to be exciting and hopefully some trades will set up for us.  The Trump-Kim meeting in Singapore on Tuesday, is followed by FOMC on Wednesday, ECB on Thursday and BOJ to complete the week.

Good luck with your trading and enjoy your weekend.

 

 

 

 

The EURUSD set up today for a very rewarding R:R as we were able to enter short risking 14 pips for a potential 100 pips to our daily target at 1.1604. The pair stair-stepped down after it failed to close above its multi-pivot.   Protecting our profit in advance of the ISM Non-Manufacturing release caused our trade to be closed before the last wave down.

After the U.K. session a report that the ECB live meeting on June 14 could give us an announcement as to when they intend to stop buying bonds.  This jolted the EURUSD higher.  Never fight the market, but I don’t expect a lot to materialize from this.  We will watch and see if the EUR takes out important technical levels or if it begins to fade again.  Despite the reversal after the U.K. close, overall the range was tighter than expected today which leads me to be suspicious of the strength behind the countertrend move.

The U.S. tariffs are more a concern for the USD at the moment in my opinion. than a sudden pop in the EURUSD.  Watch how price reacts at the key technical levels, keep your stops tight and protect your profits.

The RBA left rates unchanged which gave way to further selling today.  The NZDUSD which tends to move lockstep with the AUDUSD most days had a very appealing entry after it failed to stay above its Asian high.  The AUDUSD setup was less attractive as it was in the middle of its Asian range.  Congratulations to those who traded the Kiwi.

The Canadian dollar continues to get beat up with NAFTA negotiations going sideways and oil moving lower.  WTI is retesting a critical level which will be telling for the pair.  The pair looks heavy above 1.3000 but if WTI moves lower and NAFTA negotiations continue to stall, we may see 1.31oo get tested again.  There is a lot of CAD news going forward this week including the Trade Balance and Crude Oil Inventories tomorrow.  BOC Governor Poloz will be speaking Thursday and Employment numbers  are due Friday.  It looks like it will be a busy pair.

Good luck with your trading!

 

 

As mentioned previously, I like to look for short setups in the EURUSD and GBPUSD until the current trend changes.  Today both pairs set up but the GBP short only required a 14 pip stop loss for a potential 65 pips to our daily target.

It took price about 45 minutes to get going but once it did… after pausing at Friday’s high, it was able to descend right to our target where we exited.

Mondays are my least favourite day to find trade setups because the correlations tend to be less clear or conflicting.  This trade was helped by there being no U.S. economic news releases.

The U.S. economic news calendar is fairly light this week.  Tariff banter may affect market sentiment.  The continuing strong U.S. economy has traders pondering the question as to whether there will be just 3 rate hikes this year or is a fourth a likelihood?

Good luck with your trading and enjoy your trading week!