Archives for July 2019

Britain now has Prime Minister Boris Johnson leading the Brexit challenge and hoping to accomplish what Teresa May was unable to complete.

The uncertainty as to how the divorce from the E.U. will be accomplished by October 31st will likely continue to weigh on the GBP regardless of the political rhetoric.

With persistent USD strength this past week and uncertainty in Britain, the GBPUSD set up nicely for a short on Friday risking 14 pips for a potential 34 pips to our daily target at 1.2382.

This trade was a little tricky in that on a Friday how likely is it that the GBPUSD would break and stay below the 1.2400 figure…but it did and it made its way down to our daily target for a satisfying trade.

On July 31st the market remains uncertain as to whether the U.S. Fed will cut rates by 25 or 50 basis points. President Trump will certainly be hoping for 50 bp – but it is not up to him. Usually lower interest rates will cause a currency to weaken but this may not be the case if the Fed only cuts by 25 bp. Expect some volatility on Wednesday and keep in mind that the first move the market makes after the announcement will be reactionary and it is easier to fade a reactionary move that to chase it.

Good luck with your trading!

The major event risk for the week was the ECB interest rate decision, policy statement and press conference.

ECB’s Mario Draghi left interest rates unchanged, but concern about the economy of Germany and the E.U. will continue to offer opportunities to fade any rallies.

The USD was able to continue upward today and a long entry was found in the USDJPY after the ECB press conference…risking 15 pips for a potential 37 pips to our daily target at 108.58.

Price moved higher, paused, pulled back just a few pips, then moved to our daily target in advance of the U.K. close.

Tomorrow the GDP and Michigan consumer sentiment releases will be closely watched. Traders are still deciding whether the Fed will cut the interest rate by 25 or 50 bp on July 31st.

Good luck with your trading!

The AUDUSD has been moving down for three days in a row. Today with USD strength, a short setup was found risking 8 pips for a potential 28 pips to our daily target at .6994.

Price began to move lower early in the U.S. session, then moved through its Asian session low and continued toward the technically significant .7000 figure. At the U.K. session close, we exited the trade for modest gains just above our daily target.

Boris Johnson will be the new prime minister of Britain.

All eyes will be on the ECB this Thursday.

Good luck with your trading!

The USDCAD began climbing higher after the U.S. economic releases today. Both Brent and WTI oil were off more than 2%. The pair had been making a series of higher lows and a long entry was taken risking 9 pips for a potential 32 pips to our daily target at 1.3094.

As price closed above its Asian session high, we locked in some profit moving our stop loss to slightly positive. Price continued higher despite the USD index and gold being relatively flat.

After price moved higher and formed what looked like a reversal pattern, we moved our take profit beneath its structure and fortunately price moved up to test yesterday’s high and the trade was closed at our daily target.

The pair continues to find buyers just above 1.3000 and sellers near the 1.3150 levels.

The market continues to be focused on the progress of the U.S. – China trade talks.

In the meantime, the market is also beginning to price in a 50 bp cut as opposed to a 25 bp cut by the Fed this month.

Good luck with your trading!

As we approached the retail sales release today, the USDJPY moved up just in advance – as if the market knew the number would be favourable. Risking 12 pips for a potential 34 pips to our daily target at 108.36 we went long too.

Price jumped higher, traded sideways for a bit, then moved higher going into the U.K. close where we exited the trade.

If we had waited any longer for an entry, we would not have been able to accept the reward to risk ratio. The USD has strengthened as the market acts in a way consistent with a short-term attention span. The market is definitely a two-way market and one week doesn’t have to be consistent with the sentiment of the previous week or previous tweet.

The good news is the daily ranges seem to be expanding a bit and the U.S. – China trade talks are progressing once again. Oil is off as the U.S. – Iran confrontation/provocation has decreased today.

Good luck with your trading!

As the trading week comes to a close, the USD moved down against the majors and we liked the USDJPY setup. The pair made its high for the day early in the Asian session. It made a lower high in the first half of the U.K. session and made another lower high early in the U.S. session overlap.

Risking 10 pips for a potential 22 pips to our daily target which corresponded with the 108.00 figure, a short trade was taken. Price was able to move down easily to our target where we exited the trade.

Sentiment is negative today for the USD going into the weekend. The major pairs seem to be a little more active, which will bode well for trading if it continues.

President Trump remains keen on “tweeting” the dollar down and Chairman Powell had a dovish tone throughout his Humphrey Hawkins testimony this week.

Good luck with your trading and enjoy your weekend!